Working Paper Series
Social Networks and Crime Decisions: The Role of Social Structure in Facilitating Delinquent Behavior
() and Yves Zenou
Abstract: We develop a model in which delinquents compete with each
other in criminal activities but may benefit from being friends with other
criminals by learning and acquiring proper know-how on the crime business.
By taking the social network connecting agents as given, we study the
subgame perfect Nash equilibrium of this game in which individuals decide
first to work or to become a criminal and then the crime effort provided if
criminals. We show that this game always has a pure strategy subgame
perfect Nash equilibrium that we characterize. Ex ante identical
individuals connected through a network can end up with very different
equilibrium outcomes: either employed, or isolated criminal or criminals in
network. We also show that multiple equilibria with different number of
active criminals and levels of involvement in rime activities may coexist
and are only driven by the geometry of the pattern of links connecting
criminals. Using the equilibrium concept of pairwise-stable networks, we
then show that the multiplicity of equilibrium outcomes holds even when we
allow for endogenous network formation.
Keywords: Strategic Interactions; Multiple Equilibria; Pairwise-Stable Networks; (follow links to similar papers)
JEL-Codes: C72; K42; Z13; (follow links to similar papers)
19 pages, October 21, 2003
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