Shoplifting, monitoring and price determination

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16 Scopus citations


Shoplifting is a major crime problem costing American retailers more than $10 billion per year. Surprisingly, despite the evolvement of an extensive theoretical literature on the economics of some major economic crimes, shoplifting has failed to attract economists' attention. The present paper applies the economic toolbox to this problem, developing a principal-agent type model of shoplifting and shoplifting control. The model examines the customer's decision of whether to shoplift or not as well as the store's profit-maximizing price and monitoring intensity. The paper challenges the conventional wisdom that the observed rise in shoplifting calls for intensified monitoring and higher prices, showing that a rational response to increased shoplifting involves a reduction in both monitoring and prices.

Original languageEnglish
Pages (from-to)608-610
Number of pages3
JournalJournal of Socio-Economics
Issue number4
StatePublished - Aug 2009
Externally publishedYes


  • Monitoring
  • Price determination
  • Public shame
  • Shoplifting


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