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A burglar enters a home by breaking apart the side door that the homeowners recently installed for $400. Once inside the home, the burglar puts down the sledgehammer worth $50 in the hallway and proceeds to the dining room and begins loading silverware, liquor, and porcelain valued at $2000 into a bag. Then suddenly, the burglar hears a car approaching in the driveway and flees through the back door with the bag of valuables. As he flees, he drops an unopened bottle of cognac worth $150 that shatters in the backyard.
a. What is the perfect compensation to the homeowners? What does perfect compensation mean?
b. What is the perfect disgorgement value? What does perfect disgorgement mean?
c. What is amount would constitute a monetary punishment? What does monetary punishment mean?
d. There is a 50% chance that the burglar will be apprehended and convicted. What is the benefit and net benefit to the burglar?
e. If the burglar is apprehended, is returning all of the items stole or their value in cash an appropriate punishment? Explain clearly.
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