{"id":4210,"date":"2012-05-17T09:00:43","date_gmt":"2012-05-17T13:00:43","guid":{"rendered":"http:\/\/www.Centives.net\/S\/?p=4210"},"modified":"2012-05-17T04:18:22","modified_gmt":"2012-05-17T08:18:22","slug":"the-economics-of-kidnapping","status":"publish","type":"post","link":"http:\/\/www.Centives.net\/S\/2012\/the-economics-of-kidnapping\/","title":{"rendered":"The Economics of Kidnapping"},"content":{"rendered":"<p style=\"text-align: center;\"><img decoding=\"async\" src=\"http:\/\/www.aeroplanes.com\/travel\/wp-content\/uploads\/2011\/02\/kidnap.jpg\" alt=\"http:\/\/www.aeroplanes.com\/travel\/wp-content\/uploads\/2011\/02\/kidnap.jpg\" \/><\/p>\n<p>Megan McArdle applied economic theory to kidnapping and came up with the following conclusions:<\/p>\n<ul>\n<li>Hostage negotiations are &#8216;bilateral monopoly price negotiations.&#8217; There is just one seller (the kidnapper) and one buyer (the hostage&#8217;s loved ones.)<\/li>\n<li>In such a market two things determine price: willingness to accept failure and capacity to pay.<\/li>\n<li>The party that is more willing to accept failure \u2013 that is an inability to mutually agree upon the worth of the hostage \u2013 has more bargaining power.<\/li>\n<li>Those who are able to pay more have less bargaining power. This is likely why Filipinos are significantly cheaper to ransom than Europeans.<\/li>\n<li>What <em>shouldn&#8217;t <\/em>matter is the established &#8216;market-price&#8217; for a hostage. In such a situation there is no established market \u2013 there is just a series of one-off transactions.<\/li>\n<\/ul>\n<p>To read more about deviations from this model, what this has to say about economics as a whole, how this relates to Somali pirates, and the mistake that both Caesar and his kidnappers made, click <a href=\"http:\/\/www.theatlantic.com\/business\/archive\/2012\/05\/kidnapped-by-pirates-at-sea-heres-how-economics-can-save-you\/256828\/\">here<\/a>.<\/p>\n<p>Source: <a href=\"http:\/\/www.theatlantic.com\/business\/archive\/2012\/05\/kidnapped-by-pirates-at-sea-heres-how-economics-can-save-you\/256828\/\">The Atlantic<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Megan McArdle applied economic theory to kidnapping and came up with the following conclusions: Hostage negotiations are &#8216;bilateral monopoly price negotiations.&#8217; There is just one seller (the kidnapper) and one buyer (the hostage&#8217;s loved ones.) In such a market two things determine price: willingness to accept failure and capacity to pay. The party that is [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4221,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4210","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-bulletin"],"jetpack_featured_media_url":"http:\/\/www.Centives.net\/S\/wp-content\/uploads\/2012\/05\/kidnap1.jpg","_links":{"self":[{"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/posts\/4210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/comments?post=4210"}],"version-history":[{"count":4,"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/posts\/4210\/revisions"}],"predecessor-version":[{"id":4222,"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/posts\/4210\/revisions\/4222"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/media\/4221"}],"wp:attachment":[{"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/media?parent=4210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/categories?post=4210"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.Centives.net\/S\/wp-json\/wp\/v2\/tags?post=4210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}