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Research Do Harsher Punishments Worsen Crime? Some law and government officials have argued for a legal system of "maxi- mum penalties," where even those who commit small crimes are pun- ished with extreme measures. They argue that this approach would be a cheap and effective deterrent to crime. However, two finance pro- fessors believe that this approach could backfire. Kathleen Hagerty, a professor of finance at the Kellogg School of Management at Northwestern University in Evanston, Illinois, and Philip Bond, associate professor of finance at the University of Min- nesota's Carlson School of Manage- ment in Minneapolis, applied a math- ematical model to the problem. They found that a system of maximum penalties creates an "all-or-nothing" environment, where crime is either completely eradicated or never-ending. The former sce- nario is impos- sible in a world where humans are unpredictable and law enforce- ment inconsis- tent. Therefore, the researchers posit, harsh pen- alties for minor crimes do noth- ing but perpetu- ate all crimes. In any society, Kathleen Hagerty er crimes, say Hagerty and Bond. Under that system, people who are only moderately inclined toward crime won't graduate to more severe offenses. The difficulty, the two admit, is to ensure that these penalties are harsh enough to keep even small crimes in check. Their paper, "Preventing Crime Waves," appeared in the August 2010 issue of the American Economic Journal: Microeconomics. Good Leaders Aren't Always the Loudest Philip Bond there will be people who will never commit crimes, people who might commit crimes, and people who are wired for crime, no matter what the penalty. The key to reducing crime, the researchers argue, is to target the middle group. Among this group, many will commit small crimes, because the potential penalties are low if they are caught. However, should a system of maximum penalties be enforced, Hagerty and Bond's model predicts many of these would-be petty crimi- nals will instead commit more radical crimes—robbing a bank, for instance, instead of a convenience store—to make the crime commensurate with the potential reward. As these crimes increase, law enforcement would be overwhelmed, decreasing criminals' chances of getting caught. This sce- nario would eventually worsen the crime wave that maximum penalties were meant to suppress. To stop a crime wave, law enforcement should instead mete out less severe punishments for less- 50 BizEd MARCH/APRIL 2011 When we think of great leaders, we often think of those outgoing individuals who take control of a group. But a new study shows that sometimes an introverted leader may be a compa- ny's best choice. The study was con- ducted by Adam Grant of the Uni- versity of Pennsylvania's Wharton School in Philadelphia, Fran cesca Gino of the Harvard Business School in Boston, Massachusetts, and David Hofmann of the University of North Carolina's Kenan-Flagler Business School in Chapel Hill. The three researchers focused their study on productivity and team performance in pizza delivery franchises. They sent questionnaires to 130 stores and received respons- es from 57, including each store manager as well as 374 employees. The researchers asked store managers to rate their degree of extraversion; employees were asked to rate how proactive they and their co-workers were in terms of stating their opinions and implementing or correcting procedures. Grant, Gino, and Hofmann found an inverse relationship between the proactivity of employ- ees and the personalities of store BRAND X PICTURES/GETTY IMAGES