A few thoughts on this story. First, my girlfriend was talking to me about this yesterday and her comment is that it's appearently very common for people who try to help to get blamed. They mention some anecdotes in the piece but I think this explanation is undersold, esp. since diffusion of responsibility can't explain the Kitty Genovese episode much less what I will dub Chinese Kitty Genovese.
Second, I hate it when people comment on this story and say things like
Yes, it's true that some idiots don't believe in externalities, behavioral biases, or any kind of market failure. They are crazy. But they are few and far between. The externality from murder is so obvious you don't need to know the concept of externality to see it.
A rational, forward-thinking individual trying to maximize his own utility…so mustn’t this be the efficient outcome that maximizes social welfare?
Extra points to those who can set up and solve this cost-minimization problem
Third, I like extreme examples where price theory is the (apparent) explanation for some otherwise completely implausible behavior. This is the main reason I'm pro death penalty. The statistical evidence is, as far as I can tell, not going to answer the question, but the fact that 1 person is willing to murder someone to avoid paying a fine suggests to me that at least a couple people are willing to not murder to avoid getting executed. And I'd vote to kill at least 10 murderers and 1 innocent person to save 2 innocent person.
I hope the Chinese government executes the fucker that ran over that girl.