A model is examined in which individuals take precautions that reduce the amount stolen if thieves enter their homes; and the amount of theft is influenced by the level of individuals' precautions. It is emphasized that the motive of individuals acting alone to take precautions may include the diversion of theft to others but does not take into account general deterrence. For this and other reasons, the level of precautions exercised by individuals acting alone may differ from their collectively optimal level and also from the socially optimal level (which reflects effort devoted to theft).
*Published:
International Review of Law & Economics, September, 1991, Vol. 11, No. 2, 1 23-132.
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