Working Paper: CEPR ID: DP10709
Authors: Yingju Chen; Yves Zenou; Junjie Zhou
Abstract: We consider a network model where individuals exert efforts in two types of activities that are interdependent. These activities can be either substitutes or complements. We focus on criminals that either exert efforts in crime and education (substitutable activities) or crime and drug consumption (complementary activities). We provide a full characterization of the Nash equilibrium of this game for any network structure and show under which condition it exists and is unique. We then derive some comparative statics results that offer strong empirical predictions on the effect of own productivity on both efforts and how network density affects equilibrium outcomes. Finally, we re-examine the key-player policy that consists in determining the criminal who, once removed, reduces total crime the most. We show that, if the planner ignores the fact that criminals have multiple activities, then she can wrongly determine who the key player is.
Keywords: criminal networks; key player; multiple activities
JEL Codes: A14; D85; K42; Z13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increase in productivity in crime (K42) | increase in efforts in education (I24) |
| increase in productivity in crime (K42) | increase in drug consumption among peers (C92) |
| network density (D85) | equilibrium outcomes (D51) |
| multiple activities (Y80) | misidentification of key players in crime reduction strategies (K42) |