We consider a parole board that learns about inmates' rehabilitation statuses from observing actions in prison. We show why a board would release one inmate, but not otherwise observationally identical inmates with longer sentences: greater parole board discretion makes additional information more valuable. Consequently, increasing sentences can lead to even greater increases in expected time served. We determine how sentence length affects rehabilitation incentives. To encourage effort, sentences cannot be too short, but when inmates are sufficiently impatient, long sentences may also be undesirable. We show how different parole board priors can support multiple equilibria in rehabilitation effort and investigate the effects of discretion restrictions like parole eligibility.
ASJC Scopus subject areas
- Economics and Econometrics
- Organizational Behavior and Human Resource Management