The Real Puzzle of Blackmail: An Informational Approach
AbstractThe "puzzle" of blackmail is that threats to reveal private information that would be harmful to someone in exchange for money are illegal, but revelation is not. The resolution is that concealment of information about product quality impedes the efficient operation of markets, whereas revelation promotes it. The real puzzle is why possessors aren't naturally inclined to sell to uninformed parties, who value the information more than would-be blackmail victims. The answer has to do with the public good qualities of information, which create an appropriability problem in transactions with uninformed parties. The paper also discusses incentives to acquire compromising information.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2010-08.
Length: 18 pages
Date of creation: Apr 2010
Date of revision:
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More information through EDIRC
Asymmetric information; blackmail; adverse selection;
Other versions of this item:
- Miceli, Thomas J., 2011. "The real puzzle of blackmail: An informational approach," Information Economics and Policy, Elsevier, vol. 23(2), pages 182-188, June.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-24 (All new papers)
- NEP-CTA-2010-04-24 (Contract Theory & Applications)
- NEP-HPE-2010-04-24 (History & Philosophy of Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Leland, Hayne E, 1979. "Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1328-46, December.
- Johannes Horner & Andrzej Skrzypacz, 2013.
Levine's Working Paper Archive
786969000000000680, David K. Levine.
- Johannes Horner & Andrzej Skrzypacz, 2009. "Selling Information," Cowles Foundation Discussion Papers 1743, Cowles Foundation for Research in Economics, Yale University, revised Aug 2010.
- Johannes Horner & Andrzej Skrzypacz, 2009. "Selling Information," Cowles Foundation Discussion Papers 1743R, Cowles Foundation for Research in Economics, Yale University, revised Nov 2012.
- Johannes Horner & Andrzej Skrzypacz, 2009. "Selling Information," Cowles Foundation Discussion Papers 1743R, Cowles Foundation for Research in Economics, Yale University, revised Jun 2011.
- repec:cup:cbooks:9780521283694 is not listed on IDEAS
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- Steven Shavell, 1994. "Acquisition and Disclosure of Information Prior to Sale," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 20-36, Spring.
- Gomez, Fernando & Ganuza, Juan-Jose, 2002. "Civil and criminal sanctions against blackmail: an economic analysis," International Review of Law and Economics, Elsevier, vol. 21(4), pages 475-498, May.
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- Helmholz, R H, 2001. "The Roman Law of Blackmail," The Journal of Legal Studies, University of Chicago Press, vol. 30(1), pages 33-52, January.
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