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= The economics of crime = The economics of crime focuses on the effects of incentives on criminal activity, the manner in which decisions interact

in a market system, and the use of a cost-benefit paradigm to test potential crime prevention strategies. Economic models not only predict and explain the actions of criminals, but can also be

used to identify the causes of crime and the complex relationship between criminals and anti-crime initiatives.

Rational Choice Theory
Nobel Prize Laureate Gary Becker introduced the standard economic model of crime in 1968. His study fundamentally modified the way of thinking about criminal activities by showing that not so much mental disorder and social injustice, but human rationality, dictates whether or not a person participates in criminal behavior. Becker's rational criminal chooses whether or not to commit crimes on the basis of a cost-benefit analysis aimed at optimizing utility. To this effect, many studies corroborate the idea that the higher the probability of punishment and ,to a lesser extent, the severity of punishment ,the greater the deterrence on crime. The recidivism of criminals is in accordance with the rational criminal model because when preferences of the convict are consistent and the resources available remain the same the amount of illegal conduct will not decline after a conviction.

The individual’s expected utility E[U] from committing an

oﬀense is:

E[U]=PU(Y−f)+(1−P)U(Y), "where U(·) is the individual’s von Neumann–Morgenstern utility function, P is the subjective probability of being caught and convicted,

Y is the monetary plus psychic income (i.e. the monetary equivalent)from an oﬀense, and f is the monetary equivalent of the punishment.

The individual will commit the oﬀense if the expected utility is positive, and he will not if it is negative".

Criticism of Rational Choice Theory
Some criminologists are skeptical of the ability of RCT to provide a general model of crime as well as the rationalist assumptions that it makes. Skeptics claim that rational choice theory, if applicable to crime, is narrow in its application to property crimes but not crimes such as violent crime. Sociological criminologists contest that RCT is "too economical" and lacks a serious approach to the theoretical frameworks a the center of social theories of crime. The debate revolves around whether criminals possess rationality that is "bounded" or "limited". Experts wonder if criminals have enough information to adjudicate the outcomes of their actions as well as whether the motivation, identity, and surroundings of the criminal are accounted for.