DIFFERENTIATING BETWEEN FIRST AND REPEAT OFFENSES

1. INTRODUCTION Consider the following four situations. First, suppose a speed limit has been set on a highway. Speeding on this highway increases the possibility of an accident and thus causes harm. Occasionally, some drivers find it especially beneficial to break the speed limit to, for example, make it to work on time, and can do so contributing limited harm. A few drivers, though, do not regard the safety of fellow individuals on the road and frequently speed, elevating the danger level on the highway. How should speeding be fined? Second, a small, residential college has chosen to ban alcoholic beverages on campus. Most students chose to attend this college because of the student life and may only occasionally experiment with alcohol. This experimentation is done in private and likely does little harm. A small number of students frequently drink excessive amounts of alcohol. The excessive drinking lowers the quality of life of those living with these students. How should campus officials punish a student caught drinking? Third, an organizing committee is interested in promoting fair competition and sportsmanship in high school athletic events. Most student-athletes enjoy playing the game, but on occasion, they argue with a referee or engage in some form of unsportsmanlike behavior. These players do not gain much from the poor behavior and also do not cause all that much harm to the game. Unfortunately, a few student-athletes frequently engage in behaviors such as taunting opponents. These individuals disrupt the game and lower the enjoyment of the competition. How should the organizing committee punish unsportsmanlike behavior? Fourth, a firm is interested in its employees showing up to work on time. The supervisor is unable to always catch an employee showing up late, and if he or she catches a worker late, he or she is unable to discern the true motive of the tardiness. Most employees typically do not gain from being late for work but on an infrequent basis have a legitimate reason for being late. A few employees, though, repeatedly show up late for wok. Thus frequent absenteeism reduces the amount accomplished and, thus, is harmful to the firm. How should the supervisor sanction an employee caught late for work? Each of these hypothetical situations highlights a particular environment in the enforcement of policies. Individuals differ in their propensity for repeatedly engaging in an action deemed by a regulator as inappropriate. Some only occasionally prefer to violate the rule and, when they do, cause only a limited harm that is not greater than the benefit they receive from the act. A few frequently break the policy and cause significantly more harm. Each of the scenarios ends with the question of how to sanction a caught violator. In practice, sanctions are typically more severe for an offender who has a record of breaking the policy. A fine is set for speeding. Many states increase the punishment for repeated traffic violations with, for example, a suspension of the license. College policies and firm's codes of conduct often come in the form of tables describing the punishment for first, second, and third offenses. A referee may give a warning for the first time an athlete misbehaves and a stronger penalty for repeated offenses. (1) With each, the severity of the sanction increases. Punishing repeat offenders more severely than first-time offenders is rather common. Presumably, the harm caused by the violation and the benefit derived by the offender does not depend on the history of past offenses. Thus, the question posed here is why do policies make sanctions contingent on past offenses? I develop a two-period model with a heterogeneous population of individuals. One type, which I refer to as experimenters, desires to violate the policy with some probability. The other, referred to as users, always prefers to do so. In each period, each individual chooses whether or not to violate a policy. …