Crime chains

Official URL: http://dx.doi.org/10.1257/mic.20200314

How should law enforcement resources be allocated to minimize the harms from flexible, chain-form trafficking organizations? I show that optimal interventions focus on one target, the feeding source (decap-itation) or the revenue-generating tail (amputation). Decapitation dismantles the crime chain under large budgets but induces maxi-mal expansion otherwise, whereas amputation generates a rich set of detection outcomes and limits the chain's size response. A rule of thumb emerges for authorities to target tail segments under small budgets and high detection contiguity, qualified by chain profitability and enforcement parameters. Real-world interventions fail to coor-dinate on such efficient targeting. (JEL K42)