Ballester, Coralio, Calvo-Armengol, Antonio and Zenou, Yves
Journal of European Economic Association, 8, (1), . (doi:10.1111/j.1542-4774.2010.tb00494.x).
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Delinquents are embedded in a network of relationships. Each delinquent decides in a noncooperative way how much delinquency effort he will exert. We characterize the Nash equilibrium and derive an optimal enforcement policy, called the key-player policy. We then extend our characterization of optimal single player network removal to optimal group removal,the key group. We also characterize and derive a policy that targets links rather than players. Finally, we endogenize the network connecting delinquents by allowing players to join the labor market instead of committing delinquent offenses. The key-player policy turns out to be much more complex because it depends on wages and on the structure of the network.
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