Question

A study of more than 5000 bank robberies between 2005 and 2007 found that the average bank robbery lasted 4 minutes and 16 seconds and yielded about $20,000. The study also found that each additional minute that robbers spent in the bank increased their haul by about $2,000. Explain how an economically rational bank robber should determine how many minutes to spend in the bank committing the robbery. Be sure to explain the principle that a rational bank robber would apply to this decision, and how that principle would be applied.

Answer 1

An economically rational bank robber should not increase the time much more than 2 minutes as every second passed after two minutes increases the risk of being caught.

The rational choice theory applies to this decision because robbers rationally chooses which bank to rob, how much to rob and in what time. The theory predicts that the robbers only do robbery when the expected marginal utility   derived from robbery is great than the expected marginal sanction.