SELF-SELECTION AND VIOLENCE IN THE MARKET FOR CRIME

When an individual participates in the market for crime, there is a ch ance he will encounter violence. Hence, only the individuals who have a high tolerance for violence will participate in this market. If the level of violence is itself determined by the degree of tolerance of t hose who are active in the market, multiple equilibria can exist. Inde ed, it is possible that the economy settles down in a high-violence eq uilibrium, although a low-violence equilibrium is possible. Violence-r educing policies like gun control are likely to have the desired effec t, but this is not guaranteed. (C) 1997 by Elsevier Science Inc.