Adam Smith’s theory of justice holds that the appropriate punishment for a misdeed is determined, in part, by the sympathy elicited on behalf of the victim. Specifically, Smith states that: “…our first approbation of punishment is not founded upon the regard to public utility…it is our sympathy with the resentment of the sufferer…” (Smith, 1978: 475). To demonstrate his point, Smith relates an anecdote in which civilians were unwilling to report wrongdoing because the offender’s punishment was far too extreme. In this paper, we employ a laboratory experiment to investigate whether the willingness to report a crime diminishes when the severity of the punishment is dramatically elevated. Our findings reveal, as predicted by Smith, that a steep increase in the severity of the punishment indeed reduces the likelihood of individuals reporting offenders. Interestingly, that effect is not foreseen by potential offenders, who, in response to the more severe expected punishment, reduce their propensities to commit offenses.
