Crime and Moral Hazard: Does More Policing Necessarily Induce Private Negligence?
Even risk-neutral individuals can insure themselves against crimes by combining direct expenditure on security with costly diversification. In such cases — and even when one of these options is infeasible — greater policing often actually encourages private precautions.
Crime, Policing, Private precautions, Moral hazard, Diversification
GUHA, Brishti and Guha, A.
Crime and Moral Hazard: Does More Policing Necessarily Induce Private Negligence?. (2012). Economics Letters. 115, (3), 455-459. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/1427