Don't Say You're Sorry Unless You Mean It: Pricing apologies to achieve credibility

Remorse and apologies by offenders have not been rigorously analyzed in the law and economics literature. This is perhaps because apologies are regarded as 'cheap talk' and are deemed to be non-informative of an individual's conscious state. In this paper, I develop a formal framework in which one can analyze remorse and apologies. I argue that legal procedures can be designed to price apologies, such that only truly remorseful individuals apologize. Hence, apologies would not be mere 'cheap talk' and could send correct signals regarding an offender's true conscious state, making them credible. This will lead victims, upon receiving apologies, to forgive offenders more frequently. Moreover, pricing apologies does not negatively impact the possibility of achieving optimal deterrence. An (arguably negative) effect of pricing apologies is its elimination of insincere apologies. If it is assumed that apologies, even if insincere, carry rehabilitative and/or palliative benefits, then the optimality of pricing apologies depends on a trade-off between achieving credibility and increasing such rehabilitative and palliative benefits.

► A credible apology system can be designed by pricing apologies. ► When apologies are priced, remorseful offenders can relieve their guilty consciences by sending credible signals to their victims, which will lead victims to forgive remorseful offenders more frequently. ► When there are no sizeable benefits attached to insincere apologies, pricing regimes are optimal. ► When there are rehabilitative and palliative benefits attached to insincere apologies, the optimality of pricing regimes depends on a trade-off between achieving credibility and increasing rehabilitative and palliative benefits attached to insincere apologies. ► Results hold regardless of whether or not sanctions are costly to impose.