YAHAGI Ken

Abstract There is an ongoing debate on whether offenders’ private benefits must be counted as part of social welfare. It has been argued on utilitarian grounds that their utility must be included, but it has also been argued on explicit or implicit deontological grounds that their utility should not be counted at all. In this paper, we reconsider this debate from the perspective of the principal-agent relationship between a utilitarian government and law enforcers in the law enforcement process. Our results show that a utilitarian government that weighs every society member’s utility equally should direct its law enforcers to maximize an objective function that discounts criminals’ gains.

Abstract This study examines the problems that law enforcement agencies face with self-interested agents who (1) prefer to punish wrongdoers and reduce crime rates and (2) would suffer a loss of reputation resulting from law enforcement investigations that do not lead to convictions. Next, we examine how agents’ enforcement responses change with sanction size. This is fundamental to how higher-ranking authorities (e.g., the judiciary) can implement sanction policies to mitigate law enforcement agency problems. Our analysis shows that enforcement and sanctions can function as either complements or substitutes. When agents have strong preferences for reducing crime, stricter sanctions complement enforcement and increase deterrence. Conversely, when concerns about reputation loss dominate, stricter sanctions substitute for enforcement and may decrease deterrence. Consequently, a non-maximal sanction may be optimal when sanctions substitute for enforcement. This yields a novel justification for imposing non-maximal sanctions based on the behavior of the enforcer.

Abstract This study develops a theoretical framework to examine prostitution markets and discusses the appropriate regulation to enhance social welfare and prevent the spread of sexually transmitted infections and sexual abuse. We introduce a high-quality prostitution market with intermediaries (e.g., brothel owners) to provide high-quality services (e.g., formal worksites) and a low-quality prostitution market without intermediaries (e.g., informal worksites). This study demonstrates two key findings regarding regulation. First, strict regulation in high-quality markets can inhibit the beneficial activities of intermediaries, leading to lower social welfare. This suggests that lax regulation may be optimal in high-quality prostitution markets. Second, strict regulation in low-quality markets can have the opposite effect, as it encourages intermediaries’ activities and potentially increases social welfare, supporting the case for stricter regulation in low-quality prostitution markets. This study provides a new perspective on the discussion of appropriate regulations.

ABSTRACT Citizens may derive personal benefits from new technologies while remaining uncertain about their potential social harm. Consequently, citizens may delegate the decision of legal prohibition to politicians, but conflicts can arise because politicians may have self‐interested motivations. How does the interaction of uncertainty regarding social harm and politicians' incentives affect the legal prohibition of new technologies? To answer this question, we develop a two‐period political agency model combined with a law enforcement model in which citizens endogenously determine whether to become law‐breaking or law‐abiding citizens. We then demonstrate that (i) when uncertainty regarding social harm is low, politicians tend to opt for under‐enforcement, while (ii) when uncertainty is high, politicians are inclined toward over‐enforcement. Additionally, we show that as politicians have greater motivation to hold office, expected welfare is enhanced when future uncertainty about harm exceeds current uncertainty although this may result in distorted law enforcement.