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Unlawful Activities: Microeconomic Analysis of Illegal Firms


Affiliations
1 Assistant Professor, Department of Economics, Bhatter College, Dantan 721426, West Bengal, India
2 WBSES, Professor, Department of Economics, Maulana Azad College, Kolkata 700013, West Bengal, India
3 Professor, Department of Economics, University of Calcutta, Kolkata 700050, West Bengal, India
     

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Research on corrupt and criminal activity has been of particular interest among social scientists for over three decades. This paper examines in terms of a simple micro-theoretic exercise an illegal firm’s decision-making behaviour. Simple models of a profit maximizing illegal industrial firm are set up and conditions under which illegalisation of work and production occur are derived. Moreover, we explore the cases of detection of the firm at different phases of its production process and also assess the impact of deterrence, if any, on the scale of illegal activity.

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  • Unlawful Activities: Microeconomic Analysis of Illegal Firms

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Authors

Swastick Sen Chowdhury
Assistant Professor, Department of Economics, Bhatter College, Dantan 721426, West Bengal, India
Santanu Ghosh
WBSES, Professor, Department of Economics, Maulana Azad College, Kolkata 700013, West Bengal, India
Panchanan Das
Professor, Department of Economics, University of Calcutta, Kolkata 700050, West Bengal, India

Abstract


Research on corrupt and criminal activity has been of particular interest among social scientists for over three decades. This paper examines in terms of a simple micro-theoretic exercise an illegal firm’s decision-making behaviour. Simple models of a profit maximizing illegal industrial firm are set up and conditions under which illegalisation of work and production occur are derived. Moreover, we explore the cases of detection of the firm at different phases of its production process and also assess the impact of deterrence, if any, on the scale of illegal activity.

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DOI: https://doi.org/10.21648/arthavij%2F2022%2Fv64%2Fi1%2F212213