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Pirates and traders: Some economics of pirate-infested seas

Brishti Guha () and Ashok S. Guha

Economics Letters, 2011, vol. 111, issue 2, 147-150

Abstract: Even where all agents are risk-neutral, merchants can insure themselves against piracy. Such self-insurance is surprisingly invulnerable to moral hazard. Further, there exist a patrolling intensity and/or penalties for captured pirates which, along with mercantile self-insurance, could eliminate piracy.

Keywords: Piracy; Violent; crime; Economies; of; scale; Penalties; Moral; hazard; Self-insurance (search for similar items in EconPapers)
Date: 2011
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Handle: RePEc:eee:ecolet:v:111:y:2011:i:2:p:147-150