DYNAMIC DETERRENCE THEORY

Economic theories of deterrence have primarily been built on static mo dels. A common and serious shortcoming of the existing dynamic deterre nce models is the assumption of a two-period structure that ignores re cidivism. The aims of this paper are to formulate and solve a general dynamic deterrence model that incorporates recidivistic behaviour, to explore its implications, and to derive some testable predictions. The analysis shows how the value and the intensity of engaging in illegal activity change over time, highlights the weaknesses of two-period de terrence models and compares the deterrent effectiveness of increasing the likelihood of punishment versus the severity of punishment. Final ly, the recidivistic model provides a structural foundation for the wi dely used stochastic-process models of crime in operations research an d criminology.