The real puzzle of blackmail: An informational approach
The "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 are not 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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References listed on IDEAS
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- Johannes Hörner & Andrzej Skrzypacz, 2016.
Journal of Political Economy,
University of Chicago Press, vol. 124(6), pages 1515-1562.
- Johannes Horner & Andrzej Skrzypacz, 2009. "Selling Information," Cowles Foundation Discussion Papers 1743R2, 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.
- Johannes Horner & Andrzej Skrzypacz, 2013. "Selling Information," 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.
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- Cheung, Steven N S, 1982. "Property Rights in Trade Secrets," Economic Inquiry, Western Economic Association International, vol. 20(1), pages 40-53, January.
- 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 1328-1346, December.
- 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.
- Hirshleifer, Jack, 1971. "The Private and Social Value of Information and the Reward to Inventive Activity," American Economic Review, American Economic Association, vol. 61(4), pages 561-574, September.
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