Abstract:
Two countries set their enforcement non-cooperatively to deter native and foreign individuals from committing crime in their territory. Crime is mobile, ex ante (migration) and ex post (fleeing), and criminals hiding abroad after having com- mitted a crime in a country must be extradited back. When extradition is not too costly, countries overinvest in enforcement: insourcing foreign criminals is more costly than paying the extradition cost. When extradition is sufficiently costly, in- stead, a large enforcement may induce criminals to flee the country whose law they infringed. The fear of paying the extradition cost enables the countries coordinating on the efficient outcome.
