Friday, December 16, 2016

Kidnapping for ransom works like a market- How it is organized is surprising (Washington Post)

Economists and social scientists often think about difficult economic transactions. Surely, one of the trickiest possible transactions is when ransom-payers try to bargain with kidnappers to get a hostage back. In an article recently published in Governance, I look at how the business of kidnapping works. Here is why kidnapping involves some tricky business relations, how private sector institutions work to resolve them and why governments have a harder time preventing kidnapping from escalating.

Kidnapping is hard

There are three important factors that make transactions between kidnappers and ransomers difficult — problems of trust, problems of bargaining and problems of execution.

Read more at the Washington Post [HERE].