Abstract
In this paper, we analyse a differential game describing the interactions between a potential offender and the law enforcement agency. We assume that both players want to maximise their welfare expressed in monetary units, and compare the results obtained by applying the Nash equilibrium concept under symmetric with that under asymmetric information. The comparison reveals that under asymmetric information the offence rate is lower, due to the deterrence caused by the activities of the law enforcement agency. Both players' controls start at a steady state value and stick to it until close to the end of the planning horizon, when they leave the steady state to take into account the scrap value; this can be interpreted as a turnpike property of Nash equilibria. Furthermore, a sensitivity analysis is carried out. Among others, it turns out that a myopic offender tends to a higher offence level.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
