King Rat (gkr) wrote,
King Rat
gkr

Social benefits

So my poll on car security was inspired by this entry on Bruce Schneier's blog. I read the Kristof Op-Ed and thought it was pretty cool, then later saw Schneier's entry. The point is that in many cases people will pick something that is best for them, but not look at the social benefits of other options. It's a flaw in pure unregulated markets. Overall, everyone would be better off with fewer car thieves, and thus less need for car security. But given the choice, most people will opt for maximizing their personal gain.

As the Kristof Op-Ed noted, when LoJack became prevalent in Boston, car theft dropped big time. Cause thieves wouldn't be sure if a car had LoJack or not. Whereas with the Club, car thefts just shifted to those who didn't have them.

The moral is that giving economic incentives to people to nudge them to pick stuff like LoJack over the Club might be a cost effective way to reduce one type of crime.

Tags: economics
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