TERWORTB EINEMANN A Game Theoretic Model of Gun Control ROBERT Department TAYLOR of Economics and Finance, College of Business, University, Johnson City, Tennessee East Tennessee State I. Introduction With the passage of the Brady Bill in 1993 and the approval of the Feinstein Amendment the following year, gun control has once again become a subject of heated public debate in the United States. Procontrol forces point to high levels of gun ownership as the cause of much, if not most, violence in America, and argue that gun control will inevitably reduce violence by reducing the number of guns in circulation. Anticontrol forces respond that high levels of gun ownership are a response to, not a cause of, violent crime, and that gun control disarms law-abiding citizens, not criminals. Certain facts are clear. Approximately half of all American households are armed, giving the U.S. the highest rate of gun ownership in the world. Switzerland is probably second, with one-third of its households armed (Kleck 1991, 19). The relationship between levels of gun ownership and violence is harder to discern, however, as is the connection between gun control and violence. A large number of empirical assessments of gun control legislation have appeared over the past two decades.’ A recent article by Kleck and Patterson (1993) gives a useful overview of this literature. Kleck and Patterson note that the overwhelming majority of the studies either were inconclusive or found that gun control laws had no significant impact on violent crime. They conclude their literature review with the following statement: “taking prior research as a whole, it would be fair to say at this point that a consistent, credible case for gun control efficacy in reducing violence has not yet been made.” Given that the empirical literature has largely failed to resolve the gun control controversy, researchers might be well advised to take a more theoretical approach to the problem. The construction of relatively simple models of victim-criminal interaction might provide interesting insights about the desirability of gun control legislation and the mechanisms of its influence. Rarely in the gun control debate has either side stated its assumptions clearly. Formal modeling would require these as- I thank Phil Cook, Don Kates, Kip Viscusi, and two anonymous referees for their very helpful comments on this paper. 1 am also grateful to Bill Gentry, Jay Hamilton, Mike Meurer. and the participants at the Duke University Public Finance Workshop for their suggestions. ‘Some recent contributions include Kellerman (1988), Lester (1988). Jung and Jason (1988), Mundt (1990). Rich et al. (1990), Loftin et al., (199 I). Mauser and Holmes (1992), and Lester and Leenaars (1993). International Review of Law and Economics 15:26%288, 8 1995 by Elsevier Science Inc. 655 Avenue of the Americas, New York, NY 10010 1995 0144-8188/95/$10.00 SD1 0144-8188(95)00018-4 A game theoretic m&l 270 of gun control sumptions to be explicitly stated. We could then test the robustness of any conclusions reached to changes in these assumptions. This paper will undertake just such a project. The first model presented will be an attempt to formalize conclusions reached in a recent article by Polsby ( 1993).2 Polsby asserts that even if universal disarmament is optimal, gun control measures that merely move us in that direction may reduce social welfare. He is, in effect, claiming that the relationship between gun control and social welfare is nonmonotonic: social welfare may first decrease, then later increase, with increasingly stringent gun control laws. Moreover, he suggests that gun control laws stringent enough to attain universal disarmament may be politically infeasible or otherwise unattainable. Clearly, such conclusions put gun control in a very bad light.3 The second model presented relaxes two key assumptions of the first model. In the resulting model, modest gun control measures may be capable of improving social welfare, even though the relationship between gun control and social welfare remains fundamentally nonmonotonic. However, the success of gun control in this second model is highly dependent upon both the character of the control measures adopted and the motivation of criminals to obtain a gun. The paper finishes with a discussion of the second model’s policy implications, with a look at empirical work that lends support to the second model’s structure, and with some suggestions for future research. As we will see, the second model helps to make sense of recent policy changes at the state level that appear to move in opposite directions (e.g., background checks and the liberalization of concealed-carry laws). II. The Basic Model: Gun Control May Backfire Most arguments 1. 2. for gun control make two implicit Universal disarmament is an optimal state. Gun control, by moving us toward this optimal welfare. assumptions: state, will necessarily increase Even if we accept the validity of the first assumption (which is not itself uncontroversial),4 the second assumption does not necessarily hold-social welfare may first decrease, then much later, increase, with increasingly stringent gun control laws. The following simple model of victim-criminal interaction will generate this unusual result. Setting Up the Model Assume that there are two equal-sized populations of potential victims and potential criminals. The word “potential” is used here because, as we shall see, “victims” may not be attacked and “criminals” may refrain from attacking. Further assume that all ‘For a more complete rendering of P&by’s views, see Polsby (1994). sPublic finance economists may notice a resemblance between Polsby’s arguments and those made in the tax reform literature. Specifically, a system of lump-sum taxation may be perfectly nondistortionary (efficient), but merely wuwing t0ward.s a system of lump-sum taxation by way of incremental tax reforms may be efficiency-reducing (Feldstein 1976 and Dixit 1975). %ee, for instance, Keeley (1983). For a work that describes the difficulties of nuclear disarmament using the tools of game theory, see Brams and Kilgour (1988), especially chapter 4. TAYLOR 271 victims are identical and all criminals are identica1.s Finally, assume that all players, both victims and criminals, are risk-neutral, i.e., they value a lottery at its expected value. This assumption will make the calculation of payoffs straightforward. In this model, each victim is randomly paired up with a criminal. The two then play the “game” that is outlined in Figure 1. In this simultaneous-move game, the victim and criminal each have two options. The criminal (C) must decide whether to attack (A) or not attack (NA). If the attack (A) option is chosen, the criminal will purchase a gun and attack with it. This key assumption-that the criminal will always attack with a gun-will be relaxed in the next section. For the time being, think of this game as being a representation of some type of crime in which guns are used a majority of the time, such as homicide (Kleck 1991,43). As for the other player, the victim (V) must decide whether to purchase a gun (G) or not to purchase a gun (NC) for self-defense. Note again that the game is one of simultaneous moves-victims and criminals cannot observe each other’s choices before choosing themselves. This assumption is quite plausible: criminals usually do not know if they will be facing an armed victim, and victims usually do not know if they are going to be unlucky enough to be victimized. Nevertheless, this assumption will also be relaxed later in the section, with interesting results. Figure 1 also enumerates the “payoffs” that the victims and criminals will receive for different combinations of attack and armament decisions. For example, if we ignore the letter “C” for a moment, a criminal attack on an armed victim (denoted [A,GJ) gives a payoff of X for the criminal and W for the victim. Before discussing the ordering of these payoffs, first note that the payoffs themselves are expressed as changes from the payoffs involved in the “default” combination [NA,NG], in which criminals find another line of work and victims do not bother to arm themselves. Using this utopian combination as a reference point is simply a matter of preference. The choice of zero as the reference payoff for both victim and criminal is also somewhat arbitrary. Neither of these modeling choices should affect the results in any significant way. The gross payoffs to victim and criminal are ordered as follows: Z > 0 > X > W > Y, where Z is the criminal’s payoff from an attack on an unarmed victim, X is the criminal’s payoff from an attack on an armed victim, W is the armed victim’s payoff from an attack, and Y is the unarmed victim’s payoff from an attack. The criminal receives a positive gross payoff of Z from an attack on an unarmed victim; all other payoffs are negative. This feature emphasizes two important points: namely, that the only person who can possibly improve on the default combination [NA,NG] payoff is the criminal and that “crime pays” only if the victim is unarmed. An armed confrontation between criminal and victim (combination [A,G]) yields payoffs of X and W, respectively. X is assumed to be greater than W, given that the victim’s payoff if criminal has the element of surprise.6 Finally, Y is the unarmed attacked. Y is assumed to be less than W, because crime statistics reveal that resistance ‘This assumption will be relaxed in a later footnote. Surprisingly, the relaxation of this assumption may not radically alter the conclusions reached. 6A reader has pointed ow that X may in fact be less fhan W for a number of reasons, including that criminals at-e more likely than victims to be impaired in a gunfight by the consumption of alcohol or other psychoactive 272 A game theoretic moaW of gun control c V G A NG G --____-V A NA x-c 0 -Ic W-C Z-C NG 0 Y 0 I 1 Normal Form Extensive Form FIG. 1. The basic model. with a gun generally results in fewer injuries for the victim than either nonresistance or resistance with other weapons (Kleck 1991, 149, Table 4.4).’ One element of the payoffs remains to be discussed: the cost of obtaining a gun, C. This cost is equal to the sum of two components, C* and R. The constant C* may be thought of as the market price of a generic firearm in the absence of any form of gun control. The variable R, therefore, is the additional cost, monetary or otherwise, of obtaining a firearm due to gun control. It would therefore include not only taxes and the higher prices artificially induced by gun control restrictions, but also the timecost involved in finding a gun on the black market and the risk of punishment if caught violating a gun control ordinance. Including R as a component of a gun’s cost allows us to incorporate gun control explicitly into the structure of our game. This method of incorporation is very realistic. After all, as the U.S. war on drugs has amply demonstrated, government is incapable of eliminating a product that many desire. What government is capable of doing is increasing the cost of obtaining that product. Treating R as a cost component merely emphasizes that no matter how draconian gun control becomes, guns will be available at some price, though that price might be quite high. Returning to Figure 1, the cost of obtaining a gun C is subtracted from gross payoffs wherever a decision entails the purchase of a gun. Notice that the same C is subtracted from gross payoffs whether a victim or a criminal is involved. That is, gun control laws impose identical cos.!.son both criminals and ~victims.This key assumption, like substances (Kates 1991, 163, footnote 165). The only defense offered against this charge is that the ordering of X and W turns out to be inessential to the conclusions reached. ‘This assumption will turn out to be a vital one. Some researchers (such as Yeager et al. 1976 and Cook 1986) have come to a different conclusion. As Kleck (1991) notes, however, these researchers made the mistake of “lumping gun resistance in with other forms of forceful resistance”; this practice is very misleading because “other forms of forceful self-protection are far more risky than resisting with a gun.” Furthermore, note that if Y > W (i.e.. if the victim is better off being unarmed when attacked), then the 50% of American households that remain armed are in serious error, at least if they are keef&g guns for self-defense. This radical implication would seem to cast at least a little doubt on the original assumption. TAYLOR 273 the assumption of the always-armed criminal, will be relaxed in the next section. Still, this assumption may hold for certain types of gun control (e.g., a waiting period without a background check). Equilibrium Concepts What outcome should we expect from the game just described? The first step in identifying an outcome is to examine the game and see if any strategies are “dominated,” i.e., see if there are any strategies that, if pursued, would be unambiguously inferior to another strategy, regardless of what the other player does. Return to the normal form depiction of the game in Figure 1. One can easily see that if Z < C (i.e., the payoff from an attack on an unarmed victim is less than the full cost of the gun), then attacking is a dominated strategy for the criminal. Attacking will always yield a negative payoff, regardless of the armament decision of the victim, whereas not attacking would always yield a payoff of zero. Thus, a rational criminal will decide never to attack. In response, the victim will never go armed (choosing G is a dominated strategy for the victim once it is known that no criminals are attacking), and the default combination [NA,NG] will be realized. Given that we want to talk about a world where criminals do sometimes attack, we will assume that Z > C when C is low, i.e., when the costs of obtaining a gun are low. Similarly, if Y > W - C (i.e., if the unarmed victim’s payoff from an attack is greater than the armed victim’s payoff, inclusive of the cost of obtaining a gun), then arming oneself is a dominated strategy for the victim. Victims will therefore choose to go unarmed. Criminals, recognizing this, will always attack (choosing NA will be a dominated strategy for them), and the combination [A,NG] will be realized. Again, given that we want to talk about a world where victims sometimes arm themselves, we will assume that Y < W - C when C is low. Because in the real world only some potential victims arm themselves in selfdefense and only some potential criminals decide to attack, we need to find an equilibrium concept that allows for different strategies within the populations of players. One such concept is the mixed-strategy Nash equilibrium (or MSNE).8 Before describing an MSNE, let us first define some terms. Let OLbe the fraction of victims who always arm themselves (i.e., always choose G); thus, 1 - (Y of victims never arm themselves (i.e., always choose NC). Similarly, let B be the fraction of criminals who always attack (i.e., always choose A); thus, 1 - p of criminals never attack (i.e., always choose NA). So, the victim and criminal populations are divided into subpopulations whose memberships are based on strategies chosen. Now consider the decision that a typical criminal must make. This representative criminal must decide whether to join the subpopulation that always attacks (chooses A) or never attacks (chooses NA). How will this decision be made? A welfaremaximizing criminal will choose the subpopulation (and, therefore, the strategy) that offers the higher expected payoff. Suppose initially that this strategy is always attack (choose A). The criminal will therefore join this subpopulation. Of course, other potential criminals will eventually notice this difference in expected payoffs, and they ‘We know that this equilibrium concept is relevant here because every finite strategic-form (Fudenberg and Tirole 1991, 29-30). game has an MSKE A game theoretic model of gun control 274 will move into the subpopulation that always attacks+ will increase, and 1 - B will necessarily fall. This process will continue until there is no longer an advantage to moving; that is, the process will continue until expected payoffs change in such a way as to make criminals indifferent about their choice of subpopulations (strategies).g A similar process occurs with victims. Readers may recognize a kinship between the above process and the elimination of economic profits in a long-run competitive equilibrium through the entry of firms. The dynamic process described above is what generates an MSNE. In essence;an MSNE is defined as the set of population fractions a* and B* that result when the movement of individuals across groups finally grinds to a halt. When a* of victims arm themselves and p* of criminals attack, both victims and criminals are indifferent about their choice of subpopulations (strategies), so that there is no tendency for individuals to switch groups. How can we formally define a* and B*? The following two equations implicitly define these fractions for criminals and victims, respectively: a(X- C) + (1 - a)(Z - C) = a(0) + (1 - a)(O) = 0, (1) and p(w - C) + (1 - B)(-C) = BY + (1 - B)(O) = BY. (2) Notice that these equations are mathematical representations of the indifference of players regarding their choice of strategies. Take, for example, equation 2. The left-hand side of the equation is the expected payoff for a victim from joining the subpopulation that always arms itself (chooses G). Because each victim is randomly paired up with a criminal, the victim will get a criminal that always attacks with probability B and one that never attacks with probability 1 - B. The victim’s payoff from an armed confrontation with a criminal is W - C, while the payoff from arming oneself needlessly is - C. Therefore, the expected payoff is B(W - C) + (1 - B)( -C). The same logic applies to the right-hand side, which is the expected payoff for a victim from joining the subpopulation that never arms itself (chooses NC). Thus, setting the left-hand side equal to the right-hand side is equivalent to saying that victims are indifferent about their choice of subpopulations (strategies), which is what we would expect in an MSNE. By solving equations 1 and 2 for a and B, we obtain the MSNE population fractions: a* = (C - Z)/(X - Z) and B* = C/(W - Y). Thus, in the MSNE, a* of victims will always arm themselves, etc. Now that we know how criminals and victims will divide themselves among the various subpopulations (strategies), we can calculate the expected payoff for a representative criminal and victim in the MSNE: Criminal: a*P*(X- C) + (1 - a*)P*(Z - C) + a*(1 - p*)(O) + (1 - a*)( 1 - P*)(o) = 0 Victim: a*B*(W - C) + a*(1 - f3*)( -C) + (1 - a*)P*Y p*)(o) = p*y = CY/(W - Y). + (1 - a*)(1 - The expected payoff for a representative player is calculated by summing the payoffs from each combination of strategies multiplied by the probability of that combina‘For elaboration, see Fudenberg and Tirole (1991). 27. 275 TAYLOR tion occurring. These payoffs are (by the definition of an MSNE) equivalent to the payoffs obtained in equations 1 and 2. Thus, victims expect to receive a payoff of p*Y, regardless of whether they are armed, because in an MSNE they must be indifferent between their choice of strategies (subpopulations). Notice that the representative criminal’s expected payoff in the MSNE is zero-the same as it is in the default combination [NA,NG]. This feature is not a coincidence: the criminal, who has the initiative, can always decide not to attack; therefore, the payoff in the MSNE cannot be any lower than it is in the default combination. Drawing Conclusions We will define social welfare as the welfare of the victim-the welfare of the criminal will be ignored. lo Specifically, social welfare will be defined as the expected payoff of the representative victim. Armed with this definition and the above model, we can draw the following conclusions: COI\‘CLUSION1: A movement from the MSNE to [NG,NA] would increase social welfare. The representative victim would clearly be made better off by a move from the MSNE to [NG,NA] because the MSNE payoff, which is CY/(W - Y), is less than the payoff from the [NG,NA] combination of strategies, which is 0 (given our assumption that 0 > W > Y). Thus, if the government could somehow eliminate all weapons, so that criminals would be unable to attack and victims would be unable to arm themselves, we could achieve the social welfare optimum of universal disarmament. This conclusion therefore represents a potentially powerful argument in favor of gun is incapable of eliminating control. ’’ As we noted earlier, however, government weapons-it can only make them more expensive. As the next conclusion demonstrates, however, attempts by government to approach the social welfare optimum by increasing the costs of obtaining a gun may, paradoxically, reduce social welfare. COKCLUSION 2: In the MSNE, an increase in gun costs reduces social welfare. As noted earlier in this section, C, which is the cost of obtaining a gun, is equal to C* plus R, where C* is the cost of a generic firearm in the absence of any gun control regulations and R is any additional cost, monetary or otherwise, imposed by gun control. If we take the derivative of the representative victim’s expected payoff, CY/(W - Y), with respect to R, we obtain Y/(W - Y), which is less than 0. In other words, stricter gun control reduces the representative victim’s expected payoff, and, therefore, social welfare. This outcome occurs because higher gun costs reduce the fraction of victims who arm themselves (a*) and increase the fraction of criminals who attack (p*). That is, in the MSNE, gun control serves to disarm victims and “‘See Lenin and Trumbull (1990). This definition would seem to be particularly appropriate when one is dealing with violent crimes. “Many game theoretic models of violence seem to stop at this point. For example, Moulin (1986) uses a Prisoner’s Dilemma to model aggression. In such a model, Moulin notes, “war is the likely outcome. Decentralization of strategic choices [i.e., the decision to aggress or be peaceful] has a high collective cost.” The implication, of course, is that a centralized imposition of peaceful strategies would be welfare-improving-an argument similar to those used by gun control proponents. 276 A game thoretic model of gun control encourage criminal predation.‘* Hence the old age adage, “if guns are outlawed, only outlaws will have guns.” The implications of this conclusion for gun control policy are best seen with the aid of an example. Suppose that in the absence of gun control a generic firearm would cost $200 (C*). Also, assume that the type of crime in question is homicide, so that the gross payoffs for criminal and victim are fairly large in absolute value. Specifically, assume that the criminal’s gross payoffs are $1,200 for attacking an unarmed victim (Z) and - $500 for attacking an armed victim (X), and assume that the victim’s gross payoffs if attacked are - $600 if armed (W) and - $1,500 if unarmed (Y).t3 Given these assumptions, how would increasingly stringent gun control laws affect social welfare, i.e., the representative victim’s expected payoff? Figure 2 plots the relationship between R (the additional cost that gun control imposes on gun purchasers) and social welfare. At R = $0 (no gun control), a mixed-strategy Nash equilibrium exists. In this MSNE, the representative victim’s expected payoff is approximately - $333 (= CY/[W - Y]). As R increases, social welfare falls: fewer victims arm themselves and more criminals attack. Social welfare continues to fall until R reaches $700. At this point, gun control has increased the price of a generic firearm by 350%. In fact, the cost of a generic firearm has become so high that any further increases will make W - C < Y; that is, further increases will make arming oneself a dominated strategy for victims, as discussed above. Victims will therefore stop arming themselves; criminals, realizing this, will always choose to attack. Thus, [A,NG] will be the outcome of all confrontations, and the representative victim’s payoff will be Y = - $1,500. Social welfare remains at - $1,500 (the curve in Figure 2 flattens out) until R finally reaches $1,000. At this point, gun control has increased the cost of a generic firearm by 500%. The cost has become so high that any further increases will make C > Z; that is, further increases will make attacking a dominated strategy for criminals, as discussed above. Criminals will therefore choose not to attack, and [NA,NG] will be the outcome of all confrontations. The representative agent’s payoff will jump discontinuously to $0 and remain there for all further increases in R.14 Of course, further increases in R have no impact anyway, because at this point universal disarmament has been achieved.15 This example has several important implications for gun control policy. First and “Victims may also respond to higher gun costs by substituting cheaper guns for mm-e expensive guns (e.g., substituting revolvers for automatic pistols). The cheaper guns will, in general, be less effective self-defense weap OllS. IsThese payoffs represent the noney value of the different outcomes to criminals and victims. These values incorporate such things as fear, physical pain, etc. Readers are encouraged to try other values if they find these to be extremely unrealistic. “What sort of effect would relaxing the assumption of identical criminals have in this example? Suppose that criminal i receives an identical gross payoff of Q (rather than 2) for attacking an unarmed victim. Let fl be a normally distributed random variable with mean 2 and standard deviation o. In this case, the graph displayed in Figure 2 would become “smoothed out” around R = $1,000 (see the light-dotted curve in Figure 2). There is currently a discontinuity in the graph at this point because all criminals, being identical, switch to the NA strategy at the same time. With criminal heterogeneity, however, some criminals would switch to the NA strategy at levels of R below $1,000, while some would switch above it. Note that this light-dotted curve would become more “stretched out” horizontally with increases in the dispersion parameter o. IsNote that if the absolute value of Y is especially high (as may be the case with homicide), the curve in Figure 2 may not have time to flatten out before reaching R = 2 - C*, which is the point where criminals all switch to the NA strategy. TAYLOR Representative Expected PZ@f 277 Victim’s (See F- 14) 41500 -R=S700 $0 Parameter Settings: w = -$6oo;x = -$500; FIG.2. An example Y = -$IJoo;Z of “Backfiring” R=SlOOO = $1,200; c* R = $200 gun control. foremost is the implication that increasingly stringent gun control laws may make things worse for victims long before they make things better; that is, the relationship between gun control stringency and victim welfare may be fundamentally nonmonotonic. In short, gun control can easily backfire by putting victims at a strategic disadvantage in confrontations with criminals. A second implication is that although increasingly stringent gun control laws can theoretically achieve universal disarmament, the stringency necessary to do so may be politically infeasible. In the above example, the cost of obtaining a gun must be increased by 500% to disarm the entire population. One can easily imagine gun control laws strict enough to do this (warrantless house-to-house searches for firearms, the summary execution of those found with guns, etc.), but the political feasibility of such measures is questionable, especially in the United States and other Western democracies. Note also that if gun control laws cannot be made strict enough to bring about universal disarmament, then the best gun control policy is none at all (R = $0). In short, our obsession with the unachievable first-best solution of universal disarmament may be blinding us to achievable second-best solutions currently at hand. COKCLUSION 3. A movement from the MSNE to [G,NA] would increase social welfare. A movement from the MSNE to [G,NA] would unambiguously increase the representative victim’s expected payoff, because - C > CY/(W - Y). Under what circumstances would such a movement take place? Return to the extensive form depiction of the game in Figure 1. Suppose that criminals could observe the armament decisions of victims. If the victim chose to go armed (G), the rational criminal would refrain from attacking (NA) because 0 > X - C. Similarly, if the victim chose not to 278 A gametheoretic model of gun control go armed (NG), the rational criminal would most certainly attack (A) because Z - C > 0 (for low values of C, at least). Of course, the victim, being rational, is perfectly aware of the criminal’s incentives here. The victim will therefore always choose to go armed, knowing that a failure to do so will provoke a criminal attack. Thus, the criminal will never attack, and the combination [G,NA] will be the outcome of every confrontation. lf3 If criminals had some relatively low-cost means of ascertaining whether a potential victim was armed, the outcome described above might very well emerge. This conclusion suggests that laws requiring the concealment of firearms may be misguided. After all, a firearm is a more effective deterrent to attack if the criminal knows the victim is carrying one. Thus, in the absence of governmental restrictions, most individuals who carried firearms would probably carry them openly, and the armaments decision would be public, producing the outcome outlined above.” III. A More Complex Model: Gun Control, Gaod and Bad The simple model described in the previous section succeeded in generating Polsby’s results: namely, that the relationship between gun control stringency and victim welfare is nonmonotonic, and that gun control measures harsh enough to attain universal disarmament may very well be politically infeasible. The above analysis suggests that the elimination of gun control may be the best attainable policy option. This section will continue to follow the research agenda outlined in the introduction. The conclusions of the last section will be tested for robustness to changes in the model’s assumptions. As we will see, some elements of Polsby’s analysis will remain intact in a more complex model, while others will have to be modified. Setting Up the Game The two key assumptions of the model presented in the previous section-that gun control laws impose equal costs on criminals and victims, and that criminals always highly unrealistic and should be modified. Let us look at the attack with a gun -are assumption of equal costs first. While this assumption may be true for some gun checks), it is certainly not control policies (e.g., waiting periods without background true for others. Some gun control policies may raise costs for victims more than costs for criminals. For example, a prohibition on the sale of firearms would force all individuals, victims and criminals alike, to purchase weapons on the black market. Presumably, criminals would have better access to the black market and better knowl- ‘6Technically. making the armaments decisions of victims public converts the game depicted in Figure 1 into one of perfect information. Applying backwards induction to this new game will yield [G,NA]; this outcome is a subgame-perfect Nash equilibrium (Fudenberg and Tirole 1991, 74; Tirole 1988, 429). “One possible justification for concealed carry laws is that a concealed gun provides a more general deterrent effect than an unconcealed gun. Guns carried openly are, in effect, a private good: they deter criminals from attacking the person who is carrying. Guns carried concealed are, however, a public good: they deter criminals from attacking people in general, because the criminal cannot tell who is armed and who is not. However, economic theory suggests that public goods will tend to be underprovided in the absence of corrective subsidies. So, people will have a tendency to “free ride” on the concealed carrying of others; this free riding may lead to low levels of firearms carrying and therefore low levels of general deterrence. Therefore, public subsidies for concealed carrying might be required. 279 TAYLOR edge about prices on it. Thus, prohibition would increase costs for both groups, but presumably less so for criminals. On the other hand, some gun control policies may raise costs for criminulr more check before a firearms than costs for victims. For example, requiring a background purchase is allowed will almost certainly impose heavier costs on criminals than given to criminals who victims. Also, add-on penalties (i.e., additional punishment use firearms in the commission of a crime) would impose potentially heavy costs on criminals without imposing any costs on victims. In short, any realistic model of gun control should allow for the possibility of policies that have disproportionate impacts on criminals and victims. The model in this section will allow for this possibility by setting the criminal’s cost of obtaining a gun, C,, equal to the sum of C* and R and by setting the victim’s cost of obtaining a gun, C,, equal to the sum of C* and yR, where y is some constant greater than or equal to zero. For gun control measures that affect the two groups equally, y = 1. For those that affect criminals more than victims, y z (0,l). Finally, for measures that affect victims more than criminals, y E (1 ,~a). Now let us look at the assumption that criminals always attack with a gun. Clearly, all crimes, even homicides and commercial robberies, are often carried out by criminals not armed with a gun. Again, any realistic model of gun control should allow for the possibility of attacks without a gun. This section’s revised model is presented in Figure 3. This model is identical to the one described in the last section except for two major changes. First, the criminal now has three options rather than two: refrain from attacking (NA), attack with a gun (G), or attack without a gun (NC). Second, the two groups now face differential costs, C, and C,, which are defined above. The gross payoffs S, T, U, V, W, X, Y, and Z are ordered as follows: X > W, V > U,Z>V>O>X>T,andO>S>U>W>Y where Z is the armed criminal’s payoff for attacking an unarmed victim, V is the unarmed criminal’s payoff for attacking an unarmed victim, X is the armed criminal’s payoff for attacking an armed victim, T is the unarmed criminal’s payoff for attacking an armed victim, S is the armed victim’s payoff from an unarmed criminal’s attack, v G A NG G G NG NA X-G T 0 w-cv s-cv V V Z-CC NG Extensive Y -cv U 0 0 Normal Form Form FIG. 3. A more complex model. 280 A game theoretic model of gun control U is the unarmed victim’s payoff from an unarmed criminal’s attack, W is the armed victim’s payoff from an armed criminal’s attack, and Y is the unarmed victimTs payoff from an armed criminal’s attack. Again, the criminal is assumed to have the advantage in any encounter where the two players are equally armed (X > W) or equally unarmed (V > U). The criminal gets a higher gross payoff for an armed attack than for an unarmed attack, regardless of whether the victim is armed (X > T) or unarmed (Z > V). Finally, the victim gets a higher gross payoff for going armed than for not going armed, regardless of whether the criminal is armed (W > Y) or unarmed (S > U).” Equilibrium Concepts This model has two distinct mixed-strategy Nash equilibria (MSNEs). When R is low (i.e., gun control laws are liberal), the criminal population chooses between the G (attack with a gun) and NA (no attack) strategies. When R is high, however, criminals choose between the NG (attack without a gun) and NA strategies. One can immediately see how including an NG option in the revised model makes gun control relatively more attractive: gun control may promote “harm reduction” by encouraging unarmed rather than armed attacks.lg At what level of R will there be a “switch” between the two MSNEs? Returning to the normal form depiction of the model in Figure 3, the switch will occur when R becomes so large that Z - C, < V, i.e., when gun control becomes so stringent that the additional gross payoff a criminal gets for attacking with rather than without a gun no longer compensates for the cost of obtaining a gun. Solving this equation for R, we get R > Z - V - C*. So, when R < Z - V - C*, criminals will choose between G and NA, whereas when R > Z - V - C*, criminals will choose between NG and NA. The two MSNEs are justified and derived in precisely the same way that they were in the last section. For each MSNE, we want to find a pair (cr,p) of population fractions that make criminals and victims indifferent about their choice of strategies. This indifference, as we noted above, results from the movement of criminals and victims across subpopulations until the advantages of any given strategy have been dissipated away. Once we obtain this pair of population fractions we can proceed to calculate the expected payoffs to a representative victim and criminal in that MSNE. Let us now calculate the population fractions and expected payoffs for each of the MSNEs: ‘slf one ignores the criminal’s NA option and the costs of obtaining a gun, the model above looks very much like a Prisoner’s Dilemma. For this statement to hold true, however, it must be the case that U > W, i.e., the victim must prefer a confrontation without guns to a confrontation with guns. One can easily imagine situations where this assumption would not hold. For instance, a woman might prefer a gunfight to an unarmed confrontation with a rapist who is physically stronger than she is. As we shall see, however, this assumption is not essential to the results that follow. 19An anonymous referee has pointed out that this statement may be an oversimplification for the following reason: gun control may lead criminals to substitute knives for guns. Victims of gun crimes are far less likely to be injured than victims of knife crimes (probably because the simple display of a gun is an effective inducement to cooperation), though a gun injury is obviously much more likely to be fatal than a knife injury (Saltzman 1992). For the purpose of this model, we will simply assume that the expected payoff to a victim from a knife crime (higher probability of [less serious] injury) is greater than that from a gun crime (lower probability of [more serious] injury). If this assumption were false, then gun control would look particularly unattractive (at least within the context of this model). Low - TAYLOR 281 a(X - C,) + (1 - a)(Z - C,) = a(0) + (1 - a)(O) = 0 (3) p(w - C,.) + (1 - P)(-C,) (4) R MSNE Indifference Population (R c Z - V - C*) Equations = pY + (1 - P)(O) = pY Fractions a* = (C, - Z)l(X - Z) and p* = C,I(W - I’) Expected Payoffs Victim: a*P*(W - C,) + a*( 1 - p*)(-C,) = C,Y/(W Criminal: High - (5) a*P*(X R MSNE Indifference (R 2 Z - + (1 - a*) p*Y = p*Y - Y) - C,) + (1 - a*)P*(Z V - - C,) = 0 C*) Equations (f-3 aT+(l-a)V=a(O)+(l-a)(O)=0 p(s - C,.) + (1 - P)(-C,,) Population = pu + (1 - P)(O) = pu (7) Fractions a* = - V/(T - V) and p* = C,/(S - U) Expected (8) Payoffs Victim: a*P*(S - Cv) + a*(1 - p*)(-Cv) + (1 - a*)P*U = p*U = CvU/(S -U) Criminal: a*P*T + (1 - a*)P*V = 0 Note that the Low-R MSNE is identical to the MSNE in the previous that this one has differential costs for obtaining a gun. section, except Drawing Conclusions The two new features of this model (differential costs and an NG option criminal) change the simple model’s results in the following ways: 1. A lower y reduces victim welfare losses from for the increases in R. The ability to target criminals with gun control laws reduces the welfare losses associated with increasingly stringent gun control. Return to the curve plotted in Figure 2. The downward-sloping part of this curve has a slope of Y/(W - Y), which is the derivative of the representative agent’s expected payoff with respect to R. Suppose now that we introduce differential costs. In this case, the slope of the curve would be the derivative of C,Y/(W - Y) with respect to R, which is merely yYI(W 282 A game theoretic model of gun control - Y). Thus, as we reduce y (i.e., change the composition of gun control laws in such a way as to target criminals more), the slope of the curve will rise: the curve will become more shallowly sloped. This result means that increases in R will have less of a tendency to disarm victims. In fact, if y = 0 (i.e., gun control laws target criminals exclusively), then increases in R will impose no welfare losses on victims-the curve in Figure 2 would be completely flat in this case (slope = 0). For example, if the only gun control laws in existence were the add-on penalties discussed earlier, stiffening such penalties would not reduce the expected payoff of the representative victim (because, by definition, the law acts only to disarm criminals). 2. The existence of an NG option means that the “switch point” occurs at a much lower R. In Figure 2, guns are not eliminated until R reaches a very high level (specifically, R = Z - C*). In the revised model, however, the possibility of attack without a gun means that much more modest gun control laws (specifically, R = Z - V C*) can lead to the disarming of criminals, as long as criminals do not place a high premium on gun use in the attack. This premium is just equal to Z - V, the difference in gross payoffs between attacks with and without a gun (when the victim is disarmed). The importance of these changes is best illustrated with a specific example. Suppose again that in the absence of gun control a generic firearm would cost $200 (C*). Also, assume that the type of crime in question is rape, so that the loss to the victim is large, but the premium on gun use (Z - V) is relatively small. Specifically, assume that the criminal’s gross payoffs are $500 for an armed attack on an unarmed victim (Z) and $100 for an unarmed attack on an unarmed victim (V), and assume that the unarmed victim’s gross “payoff’ for an armed attack is -$l,OOO (Y). Furthermore, assume that y = 0.2, so that every $5 increase in R increases the criminal’s cost of obtaining a gun by $5 but increases the victim’s cost by only $1. Thus, the mix of gun control laws used here targets criminals very well.*’ Given these assumptions, how would increasingly stringent gun control laws affect the representative victim’s expected payoff? Figure 4 plots the relationship between R (the additional cost that gun control imposes upon gun purchasers) and social welfare. At R = $0 (no gun control), we are at a low-R MSNE. The representative victim’s expected payoff is - $363 here. As R increases (i.e., as gun control becomes increasingly stringent), social welfare falls: fewer victims arm themselves and more criminals attack. This continues until R = $200 and the victim’s expected payoff has fallen to - $436. At this point, gun control has doubled the cost of firearms for criminals but increased costs only 20% for victims. Notice that when R = $200, Z - C, = V; i.e., the criminal is indifferent between an armed and an unarmed attack (on an unarmed victim). Any further increase in R will disarm criminals completely and lead to a “switch” to the high-R MSNE, where criminals choose between the unarmed attack (NG) and no attack (NA) strategies. The representative victim’s expected payoff will the expected payoff with no gun jump to -$320 (which is greater than -$363, 2”The values chosen for the other gross payoffs are listed under Figure 4. They meet all of the restrictions enumerated earlier in the section. TAYLOR Representative EXpected 283 Victim’s 4320 $363 900 4436 I SO R=S200 R R=SSOO Parameter Settings: S= -$l@I;T= -$7fM;fJ= -$4@;V=$l~;W= Y = -$l,ofxI; 2 = $500; c* = $200; y = 0.2 FIG.4. An example of Welfare-Improving -$45&X= -&ioO; gun control. control”) but will immediately begin falling again as R increases. After all, once the criminals are disarmed, further tightening of gun control is counterproductive (at least in this model). Social welfare continues to fall until R = $500. At this point the cost of obtaining a gun has become so high that S - C, = U: owning a gun (G) has become a dominated strategy for victims. All victims will therefore switch to the NC strategy. Criminals, who are aware of this switch, will themselves switch to their NC strategy and always attack (though without a gun). The combination [NG,NG] will be the outcome of every confrontation, and victim welfare will remain at U = -$400 for all R 2 $500. In the example just described, modest gun control actually increases social welfare. Victims are slightly better off at R = $200 than at R = $0 (no gun control). Note, however, that this result is highly dependent on the two features of the revised model discussed above--differential costs and the NC option for criminals. In Figure 4, y is very low (0.2), meaning that gun control laws target criminals almost exclusively. Were y equal to, say, 0.5 instead, then at R = $200 the representative victim’s expected payoff would jump to only - $400, which is less than the - $363 payoff the victim would get with no gun control. Thus, gun control laws, to stand any chance of being successful, must carefully target criminals. *‘In general, the representative victim’s expected payoff after the jump will be larger than his expected payoff with no gun control if the following condition holds: [c* + y (Z - v - c*,]u s-u c*y ‘w-y Notice that the left-hand side of the equation increases with decreases in y. In other words, gun control stands a better chance of actually improving the lot of victims the more carefully targeted it is toward criminals. 284 A game theoretic model of gun control Also, modest gun control was successful in disarming criminals in the above example precisely because criminals did not value highly the use of a gun in the commission of the crime. That is, Z - V, the premium for gun use, was relatively low. Thus, a mere doubling of the cost of obtaining a gun was enough to make attacking with a gun a dominated strategy for criminals. From these results one can draw the following conclusion: CONCLUSION4: Ina model with differential costs and an NG option for criminals, modest gun control may lead to welfare improvements, but only if: 1. the measures are narrowly targeted towards criminals and 2. criminals do not value guns very highly in the commission of crime. The conclusion of this model and the conclusions of the simple model presented in the last section may seem diametrically opposed. A more careful reading, however, will reveal an important similarity. In the simple model, the chief effect of increasingly stringent gun control laws was to disarm victims and encourage criminal predation. The more complex model may also yield this result, even if the two conditions at the end of Conclusion 4 are satisfied. This similarity exists because in both models, the relationship between social welfare and the stringency of gun control is fundamentally nonmonotonic. That is, stricter gun control laws may sometimes increase welfare, but they will often reduce welfare by disarming victims, thereby placing them at a strategic disadvantage in confrontations with criminals. Only by carefully targeting such laws toward criminals do we have any hope of preventing the latter from happening. IV. Policy Implications What implications does the more complex (and hopefully more realistic) model presented in the previous section have for public policy? First note that policy makers probably have little direct control over the premium Z - V that criminals attach to using a gun in the commission of a crime. That leaves y, the measure of how carefully gun control is targeted toward criminals, as the only parameter that can be directly controlled by policy makers. The analysis in the last section clearly implies that having a y as close to zero as possible is highly desirable. That is, gun control laws are more likely to work when they are very narrowly targeted toward criminals. What kind of laws are like this? Add-on penalties for the commission of a crime with a firearm are an ideal example. As noted earlier, such laws impose no cost on victims but impose potentially heavy costs on criminals. Background checks on gun purchasers impose a modest cost on criminals while imposing little to no cost on victims (unless the background checks are very error prone). Similarly, “gun-a-month” purchase restrictions have the potential to impose higher costs on criminals than on victims by reducing the flow of guns into the black market, as would private transfer/civil liability restrictions that require the sale of firearms to be processed by a licensed gun dealer. The registration of gun owners and/or guns might also qualify as a low-y regulation. Laws that definitely would not qualify include gun bans of any sort (e.g., the Feinstein Amendment and the proposed “Brady II” ban on certain small-caliber handguns), waiting periods without background checks, heavy taxes on guns and ammunition (e.g., U.S. Senator Moynihan’s proposed ammunition tax), and prohibitions (or harsh restrictions) on the carrying of concealed firearms. These laws are TAYLOR 285 designed to bring about a general reduction in the availability of firearms. Because they make no effort to distinguish between potential victims and potential criminals, they may end up hurting the very group they were designed to help. Interestingly, there are some signs, especially at the state and local levels, that legislators are beginning to recognize the distinction between these two classes of gun control laws. Some states, such as Virginia, have recently adopted or are planning to adopt instant background check systems. 22 At the same time, many states are starting to liberalize their procedures for granting concealed-carry permits. During the first half of 1994, four states (Alaska, Arizona, Tennessee, and Wyoming) passed strong concealed-carry reform laws (NRA-ILA Report 1994).23 Moreover, Chicago’s 1983 freeze on handgun ownership is currently under attack by several of Chicago’s black political leaders, including the head of the Harold Washington Party (Ford 1994). The model presented in the previous section helps reconcile these seemingly dissimilar policy movements. V. Empirical Support The model developed in section III clearly suggests that gun control laws that carefully target criminals (e.g., add-on penalties, background checks) are more likely to be effective than those that attempt to induce a general scarcity of firearms (e.g., gun bans, heavy taxation). The model also suggests that gun control laws will have a greater impact on crimes in which the advantage of using a gun is low (e.g., rape). Is there any empirical evidence available that supports these two propositions? One of the best empirical studies to date on the efficacy of gun control legislation in reducing violent crime is Kleck and Patterson (1993). Kleck and Patterson examine the impact of nineteen different types of gun control legislation on several measures of violence (including homicide, robbery, aggravated assaults, and rapes) in 170 major U.S. cities. Their research methods are superior to those of previous studies in several ways. First, Kleck and Patterson’s unit of analysis is the city rather than the state.24 Thus, their data are less aggregated, and they are able to examine the effects of very strict local gun control ordinances. Second, unlike most previous studies, they include a large number of control variables in their regressions. Finally, Kleck and Patterson not only explicitly measure the prevalence of gun ownership but also allow for a simultaneous and reciprocal relationship between this variable and *“APProximately nine states now have instant background check systems in place (Bureau of Justice Statistics 1993, 142). *sFlorida’s concealed-carry reform legislation has served as a model for many of these states. Kleck (1991) describes Florida’s reform: “as of October 1, 1987, the state law was changed to a uniform, state-administered, largely nondiscretionary, ‘shall issue’ permit system. Unless applicants had disqualifying attributes, the state was required to issue a license if the applicants submitted the $125 licensing fee (for a J-year license), got themselves fingerprinted, and properly filled out the required forms.” Between Oct. 1,1987, and May 31,1994, over a quarter million of these concealed-carry permits were issued (Florida Department of State 1994). Critics of the law believed that its passage would increase the level of violence. There is little evidence that this has happened. Since 1987, the homicide rate in Florida hasfallen 21%, whereas the U.S. rate has risen 12% over the same period (NRA-ILA Report 1994). This is not to suggest that the liberalized permitting system has actually caused the decline, but merely to show that its critics’ worst fears have not been realized. Approximately twenty-one states (including the four mentioned above) have liberal permitting systems now; most have “shall issue” laws similar to Florida’s (Bureau of Justice Statistics 1993, 142). “0nly two other cross-sectional studies have used city data--&&l et al. (1969) and Cook (1979). 286 A game theoretic model of gun control the level of violence. 25 This last feature is important because high levels of violence might lead to increased gun ownership, just as high levels of gun ownership might tend to encourage violence. The general conclusion of Kleck and Patterson’s empirical research is that “most gun restrictions appear to exert no significant negative effect on total violence rates.” As they point out, however: There do appear to be some gun controls which work, all of them relatively moderate, popular, and inexpensive. Thus, there is support for a gun control policy organized around gun owner licensing or purchase permits (or some other form of gun buyer screening), stricter local dealer licensing, bans on possession of guns by criminals and mentally ill people, stronger controls over illegal carrying, and possibly discretionary add-on penalties for committing felonies with a gun. In terms of the model presented in section III, most of these laws are low-y laws: they carefully target the criminal element, and do little to prevent potential victims from obtaining guns. Kleck and Patterson’s conclusions therefore provide some support for our first proposition: namely, that gun control laws that carefully target criminals are more likely to be successful than those that try to induce a general scarcity of firearms. As for the second proposition that gun control laws will have more of an impact on crimes in which criminals do not value highly the use of a gun, Kleck and Patterson’s research indicates that local dealer licensing has a significant negative effect on robberies and that discretionary add-on penalties have a significant negative effect on rape. We should probably remember at this point that the two conditions listed in Conclusion 4 above are necessary conditions, not su.cient conditions, for the effectiveness of gun control legislation. That is, gun control laws may still be ineffective even if they are well targeted toward criminals (low y) and criminals have little motivation to arm themselves (low Z - V). They simply are more likely to be effective if these conditions hold. Thus, the negative results obtained by most empirical gun control studies are not necessarily inconsistent with Conclusion 4.26 VI. Conclusions and Future Research This paper developed two game theoretic models of gun control. The first model was a formalization of the work of Polsby (1995). It illustrated how increasingly stringent gun control laws might actually reduce social welfare by disarming victims and encouraging criminal predation. Moreover, it pointed out that even if universal disarmament were an optimal state, gun control laws strict enough to attain it might be politically infeasible. The second model extended the first by relaxing its two key assumptions-namely, that criminals always attacked with a firearm and that gun control imposed equal z30nly four previous studies have attempted to compute an explicit measure of gun prevalence: Zimring (1979), Cook (1979). Magaddino and Medoff (1984), and Lester (1988). None of these studies, however, allowed for a simultaneous and reciprocal relationship between guns and violence. a6Among the many studies that find little or no connection between the stringency of gun control and crime rates, the following six were written in the past decade: Mauser and Holmes (1992). Mundt (1996). Jung and Jason (1988). Lester and Murrell(1986). Magaddino and Medoff (1984). and Loftin and McDowall(l984). Earlier studies that find little or no connection include Ceisel et al. (1969) and Cook (1979). 287 TAYLOR costs on criminals and victims. In this more realistic model, modest gun control laws were sometimes capable of improving social welfare, but only if the restrictions were narrowly targeted toward criminals and criminals did not place a high premium on gun use in the commission of a crime. The policy implications of these models are fairly straightforward. Gun control laws that carefully target criminals (e.g., add-on penalties, background checks) are more likely to be successful than those that attempt to induce a general scarcity of firearms (e.g., gun bans, high taxes). The empirical work of Kleck and Patterson (1993), among others, lends some support to the model’s conclusions. In what ways might the game theoretic models developed above be extended? There are several possibilities for future research. First, criminal and victim heterogeneity might be explicitly introduced into the models. This issue was touched on above, but never fully developed. Second, risk aversion might be introduced into the models, as well. This paper’s assumption of risk neutrality-this is, the notion that people value a lottery at its expected value-is not particularly realistic. Indeed, differences in the degree of risk-aversion between criminals and victims might have important policy implications (e.g., criminals will be less concerned with the prospect of punishment for the violation of gun control laws than victims if they are less risk-averse than victims, ceteti paribus). Third, completely different types of gun control models might be tried. The models above essentially depict confrontations between “good guys” and “bad guys.” One might also develop models where “good guys” confront “good guys” (these would be “bar fight” models, which would probably closely resemble straightforward Prisoner’s Dilemmas) and where “good guys” confront persons of an unknown ethical persuasion (these would be “misidentification” models, which might be relevant for home defense [mistaking family members for criminals at night] and street defense [mistaking mysterious strangers for criminals]). 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