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Pirational choice: The economics of infamous pirate practices

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  • Leeson, Peter T.

Abstract

Abstract This paper investigates the economics of infamous pirate practices. Two closely related economic theories--the theory of signaling and the theory of reputation building--explain these practices. First, I examine the pirate flag, "Jolly Roger," which pirates used to signal their identity as unconstrained outlaws, enabling them to take prizes without costly conflict. Second, I consider how pirates combined heinous torture, public displays of "madness," and published advertisement of their fiendishness to establish a reputation that prevented costly captive behaviors. Pirates' infamous practices reduced their criminal enterprise's costs and increased its revenues, enhancing the profitability of life "on the account."

Suggested Citation

  • Leeson, Peter T., 2010. "Pirational choice: The economics of infamous pirate practices," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 497-510, December.
  • Handle: RePEc:eee:jeborg:v:76:y:2010:i:3:p:497-510
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Peter Leeson, 2014. "Pirates, prisoners, and preliterates: anarchic context and the private enforcement of law," European Journal of Law and Economics, Springer, vol. 37(3), pages 365-379, June.
    2. Skarbek, David, 2012. "Prison gangs, norms, and organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 96-109.
    3. Belasen, Ariel R. & Kutan, Ali M. & Belasen, Alan T., 2017. "The impact of unsuccessful pirate attacks on financial markets: Evidence in support of Leeson's reputation-building theory," Economic Modelling, Elsevier, vol. 60(C), pages 344-351.
    4. √Čric Darmon & Thomas Le Texier, 2014. "Private or Public Law Enforcement? The Case of Digital Piracy Policies with Non-monitored Illegal Behaviors," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201403, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    5. Guha, Brishti, 2012. "Pirates and fishermen: Is less patrolling always bad?," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 29-38.
    6. Carl Mildenberger, 2015. "Virtual world order: the economics and organizations of virtual pirates," Public Choice, Springer, vol. 164(3), pages 401-421, September.
    7. repec:kap:pubcho:v:171:y:2017:i:3:d:10.1007_s11127-017-0437-9 is not listed on IDEAS
    8. Leeson, Peter T. & Nowrasteh, Alex, 2011. "Was privateering plunder efficient?," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 303-317, August.
    9. Khusrav Gaibulloev & Todd Sandler, 2016. "Decentralization, institutions, and maritime piracy," Public Choice, Springer, vol. 169(3), pages 357-374, December.
    10. Solomon Stein & Virgil Storr, 2013. "The difficulty of applying the economics of time and ignorance," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(1), pages 27-37, March.
    11. repec:spr:ecogov:v:19:y:2018:i:1:d:10.1007_s10101-017-0199-3 is not listed on IDEAS
    12. James Kostelnik & David Skarbek, 2013. "The governance institutions of a drug trafficking organization," Public Choice, Springer, vol. 156(1), pages 95-103, July.

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