Economic Crime: Detection and Prevention

FOR12 Economic Crime: Detection and Prevention

  • Topics

    Topics

    1. The Economic Model of Crime by Becker, Crime Definitions, Review of quantitative tools

    2. Determinants of Crime. Conspicuous Consumption and Crime. Social Norms

    3. Crime Prevention, Deterrence, Incapacitation, Fines

    4. Organized Crime - Mafia, Drug Cartels, Ties between Criminals, Market Cartels

    5. Detecting Crime in the Data and in Real Life - 2 cases

    6. Crime, Organization and Principal-Agent Contracts: Insider Trading, Fraudulent Manipulation of Accounts and Whistle Blowing

    7. Tax Evasion and Money Laundering - Detection and schemes.

    8. Corruption at the Corporate and Government Level

  • Learning outcome

    Learning outcome

    On completion of the course, the candidate will:

    1.be able to apply the Becker model of crime as a framework of decision analysis

    2.have knowledge of factors that influence the likelihood to commit crime

    3.be familiar with different types of white collar crime

    4.know how to search for evidence of crime in graphs and tables

    5.be able to read and understand scholarly articles applying detection strategies

    6.be able to apply crime detection strategies considered in the course

  • Teaching

    Teaching

    Class participation. Students are expected to come to class prepared to have a conversation about the topics discussed.

    Teaching will consist out of lectures (80 %) and guest lecturers (20 %) that will cover institutional details & approaches.

  • Required prerequisites

    Required prerequisites

    Microeconomics, basic statistics, mathematics, finance/accounting

  • Credit reduction due to overlap

    Credit reduction due to overlap

    Overlap with VOA049

  • Requirements for course approval

    Requirements for course approval

    None

  • Assessment

    Assessment

    2 assignments with re-submission after feedback which account for 30 % of the grade and one home examination, 6 hours, counts 70 % of the grade. Assignments must be written in English.

    If students wish to retake the course they have to re-submit all elements in the following semester when the course is offered.

    Grading scale A-F

    The right of appeal against grades is related to the separate elements, but the process of grade explanation and appeal against grades will first begin after all the elements of the examination are completed.

  • Grading Scale

    Grading Scale

    Grading scale A - F.

  • Computer tools

    Computer tools

    MS Excel

  • Semester

    Semester

    Currently not offered.

  • Literature

    Literature

    Textbook:

    None

    Supplementary reading and details - by topic:

    1) The Economic Model of Crime by Becker, Crime Definitions, Review of quantitative tools

    • Questions: What motivates a criminal? How would you detect crime?
    • Becker, 1968 "Crime and Punishment: An Economic Approach"
    • Crime definitions - violent, property and white collar crimes
    • Review of statistical concepts, e.g. correlation, and the identification of a causal effect

    2) Determinants of Crime. Conspicuous Consumption and Crime. Social norms

    • Questions: What socioeconomic factors would push people into crime?
    • Fisman, R. and E. Miguel, 2007, "Corruption, Norms, and Legal Enforcement: Evidence from UN Diplomatic Parking Tickets" Journal of Political Economy

    3) Crime Prevention, Deterrence, Incapacitation, Fines

    • Questions: Is a prison sentence the only way to deter crime? Does prison time reform a criminal? Does hiring more police help to prevent crime? What security devices prevent crime?
    • Ayres, Ian, and Steven D. Levitt. 1998 "Measuring positive externalities from unobservable victim precaution: an empirical analysis of Lojack." Quarterly Journal of Economics

    4) Organized Crime - Mafia, Drug Cartels, Ties between Criminals

    • Questions: How do criminals choose partners? What is the common identity? What keeps criminals from blowing the whistle? What is the history of the mafia? What are the economic costs from the mafia? What are the patterns of organized crime around the world?
    • Levitt, Steven D., and S. A. Venkatesh., 2000, "An economic analysis of a drug-selling gang's finances." Quarterly Journal of Economics; Chapter 3 of Freakonomics

    5) Detecting Crime in the Data and in Real Life. 2 empirical cases.

    • Jacob, Brian A., and Steven D. Levitt. 2003 "Rotten apples: An investigation of the prevalence and predictors of teacher cheating." Quarterly Journal of Economics
    • Fisman, R. and S.-J. Wei, 2004, "Tax Rates and Tax Evasion: Evidence from "Missing" Imports in China" Journal of Political Economy

    6) Crime, Organization and Principal-Agent Contracts: Insider Trading, Fraudulent Manipulation of Accounts and Whistle Blowing

    • Questions: What motivates employees to bring corporate fraud to light? What are the incentives for fraud? How to achieve compatible incentives?
    • Dyck, A., Morse, A., and Zingales, L. 2010 "Who Blows the Whistle of Corporate Fraud?" Journal of Financ
    • DellaVigna, S., & La Ferrara, E. (2010). Detecting illegal arms trade. American Economic Journal: Economic Policy, 2(4), 26-57

    7) Tax Evasion and Money Laundering - Detection and schemes

    • Questions: How do people evade taxes? Why is tax evasion a crime? How is it detected? Why do tax havens foster money laundering?
    • Why do tax authorities in the Netherlands fine bars that do not sell enough beer?
    • Article: Schjelderup, Guttorm. "Secrecy jurisdictions." International Tax and Public Finance (2015): 1-22.

    8) Corruption at the corporate and government level

    • Questions: What is corruption? What are the challenges that government corruption poses to companies?
    • R. Fisman, 2001 "Estimating the Value of Political Connections", American Economic Review

     

    Course website: https://sites.google.com/site/nhhcrime/

Overview

ECTS Credits
7.5
Teaching language
English
Semester
Autumn

Course responsible

Evelina Gavrilova, Department of Business and Management Science