An Economic Theory of Deviance

We develop a model of deviance by incorporating the labeling effect into rational choice theory. In our model, we provide an explanation of the process through which a deviant is stigmatized and explore theoretically the relationship between the experience of having deviated and the incentive for deviation. Surprisingly, our study finds that an ex-deviant is not necessarily more likely to deviate, contrary to widely held belief. This is because the ex-deviant may hesitate to violate the norm one more time for fear of being labeled as a pathological deviant.