Deterrence theory has been developed primarily by economists, who have viewed potential criminals as rational decisionmakers faced with an array of illicit opportunities characterized by costs (time, possible adverse legal consequences, etc) and payoffs. The crime decision is thus characterized in a way that fits the well-developed theoretical framework of decisionmaking under uncertainty. Herbert Simon and others have questioned the descriptive accuracy of this theory and are beginning to uncover systematic patterns in decisionmaking that violate the predictions of economic theory. This work could usefully be incorporated into the crime choice framework. One of the most important issues for further research in this area is the way in which potential criminals acquire information about criminal opportunities and the effectiveness of the criminal justice system. A simple 'realistic' model of threat communication can be outlined that yields deterrence-like effects, even though no one is well informed concerning the true effectiveness of the system. Three other issues that have been of great interest to deterrence theorists are discussed: (1) factors influencing the rate at which active criminals commit crimes; (2) whether likelihood of punishment or severity of punishment has a greater deterrent effect; and (3) the effect of the threat of punishment for one type of crime on involvement in other criminal activities. Much of the recent empirical work on deterrence has used a fundamentally flawed approach to estimating the responsiveness of crime rates to sanction probability and severity, because the measures of 'probability of punishment' used in these studies reflect the choices made by criminals as well as the intrinsic effectiveness of the criminal justice system. Therefore, these measured do not serve as appropriate indexes of criminal justice system effectiveness. The empirical approach that appears most productive is the evaluation of discrete changes in law and police; these 'natural experiments' can tell a good deal about the deterrence process. Tabular data, 19 footnotes, and 94 references are provided. (Author abstract modified).