Impunity and Rationality in a Market for Offenses


  • Jaime Orrillo Universidade Católica de Brasília
  • Jose Fajardo Escola Brasileira de Admistração Pública e de Empresas (EBAPE) Fundação Getulio Vargas (FGV)



This paper formalizes the concept of impunity in offense markets. Wealso define incompleteness\footnote{If for each crime there is aunique law, then incompleteness could be interpreted as a situationof fragility of the penal code in  punishing crimes. Thus, therewould be space for impunity.} in these markets as a situation wherethe number of laws for each crime committed  is less that theuncertainty  represented by a  finite number of states of nature.Assuming incompleteness, we demonstrate  that  the punishment ofcrimes is a necessary and sufficient condition to find the solutionof the criminal's problem.  A criminal is any agent who is involvedin illegal activities.  Our  result can be viewed as a fundamentaltheorem of crime pricing in the  markets for offenses  that oncethe crimes are priced via impunity.


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