The government wants to reduce white-collar crime. a. Suppose for the moment innocent people are never wrongly convicted of a crime

Explain why the Becker model of crime and punishment suggests that we increase the fines people pay if they are convicted instead of hiring more people to investigate white-collar crime. b. Now suppose that mistakes happen and innocent people are sometimes convicted of white-collar crime. Why in this case might we want to hire more investigators instead of raising fines? What role does equity or fairness play in this case?

a. Gary Becker argues that the expected punishment for a crime is a product of the probability of detection and the punishment if detected. It can be very expensive to increase the probability of detection by hiring additional investigators but increasing the fine is very inexpensive. Becker therefore concludes that the optimal "penal code" should have a relatively small probability of detection, but it should impose a heavy punishment against those who are detected. If innocent people are never mistakenly convicted of a crime, the Becker conclusion makes sense; if we want to deter crime we should raise the fine, not the probability of detection.
b. But now suppose innocent people are sometimes mistakenly thought to have committed a crime. If we accept the Becker model then sometimes innocent people will pay a very heavy fine but some guilty people are able to get away with their crimes. This would be inconsistent with what most people would regard as a fair or equitable justice system.