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].