Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

Abstract: I identify a discriminatory bias in partnership formation within the property crime market in the United States. Theoretically, the prisoner's dilemma creates an incentive for a criminal to form a partnership with a counterpart with the same probability of success, resulting in an equilibrium pattern of positive assortative matching. Using individual matched report-arrest data from the National Incident Based Reporting System and a novel empirical strategy, I pinpoint matches where the underlying probability of success of two partners differ. This difference in probability is correlated with observable characteristics, which could be evidence for discrimination and search frictions. I find patterns consistent with discrimination in male-female partnerships and patterns consistent with search frictions in black-white matches. In particular, females in a male-female partnership are more likely to evade law-enforcement than males, even though on average males are more successful as a group. This results is robust to controlling for the criminal earnings, individual criminal offenses and market characteristics. Furthermore, these patterns are found also in criminal groups of a size bigger than 2. The result could be either due to pre-crime marital matching or discrimination.

Keywords: Organized Crime; Assortative Matching; Discrimination

JEL-codes: C78; J16; J71; K42

28 pages, June 11, 2014

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