Is it bad if criminals kill each other? Should the police give priority to such cases, or put them at the bottom of the stack? With the apparent increase in organized crime this is not only an ethical question. In this research we show that it may be optimal to give such cases priority when it comes to violence between members of the same gang.
The reason is simple. Gang bosses cannot trust gang members not to steal from them. As they typically cannot go to court in response to such thefts, they need to enforce good behaviour by either punishing offending gang members, or by buying their good behavior. By increasing the costs of violence against gang members, gang bosses must resort to rewarding good behavior, say by paying efficiency wages. This decreases the optimal size of the gang, as the marginal costs of hiring a gang member has increased.
However, there is a downside too. By forcing gang bosses to pay efficiency wages (e.g. by allowing gang members to keep more for themselves), it becomes more attractive to join a gang. As gangs typically recruit other criminals, this may attract more people to (non-organized) crime in the hope that they will be hired in the future.
This paper shows that police policy can affect how organized crime is organized and that this can affect the amount of crime society faces. Obviously, this covers just one aspect which may matter to gangs. More research in this field is needed to get a better understanding of we can fight organized crime and how different policies interact.
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