Kobeconomics

I’m mildly perplexed by Tyler Cowen’s take on the Kobe trial [note: the permalink is not working correctly, so you’ll have to search for “Kobe” around 9 August]:

Should economists think that Kobe Bryant is innocent? Don't we teach our students, first and foremost, that incentives matter? Didn't Kobe have huge and obvious incentives not to do it? Wouldn't an attention-seeker victim have some incentive to lie and stretch the story? Even if, heaven forbid, a guy had rape as his goal, rather than sex, wouldn't an economic model predict he would pick a different state and county? Yet I have asked a few economists, market-oriented economists, the kind who believe in the power of incentives, and they all think Kobe is guilty as charged (admittedly my sample is not huge).

First, as to Kobe’s guilt or innocence, I’m resolutely agnostic: I don’t know all the facts, so I feel thoroughly unqualified to pass judgment. I’m also militantly agnostic: I don’t know, and you don’t either.

Second, as to whether economics has something to say on the matter, I think the answer has to be a qualified “no.” The predictions of microeconomic decision theory are rarely, if ever, so specific that they tell us the actual choices of particular individuals. We usually make pattern predictions, not point predictions. Economic theory tells us that, other things equal, a greater expectation of punishment for rape should result in a smaller number of rapes. And it tells us that, other things equal, the existence of more readily available substitutes for rape (i.e., lots of willing sex partners) should result in a smaller number of rapes. But economic theory does not tell us the actual number of rapes that will occur, and it certainly doesn’t tell us that it will be zero for certain individuals.

I am not just making the point that Tyler recognized in his post, that “[s]ome economists argue that economic laws apply to averages and aggregates, in a market setting, and not necessarily to individuals.” I do think economic laws apply to individuals, at least to some extent. The point is that the kind of predictions we can make about individuals aren’t that precise. I’m willing to say this much: that a rich and famous Kobe Bryant (who has lots to lose from committing rape and many available substitutes) is less likely to commit rape than a poor and unknown Kobe Bryant (who has less to lose and fewer substitutes). But that’s as far as I can go, and "less likely" doesn't mean "never." Microeconomic theory rests on subjectivist underpinnings, which means that the strength of an economic incentive with respect to any particular person is unknown a priori.