Work

Pirates of the Mediterranean: An empirical investigation of bargaining with asymmetric information

Year: 2018

Type: article

Abstract: We investigate the effect of delay on prices in bargaining situations using a data set containing thousands of captives ransomed from Barbary pirates between 1575 and 1692. Plausibly exogenous variation in the delay in ransoming provides evidence that negotiating delays decreased the size of ransom payments, and that much of the effect stems from the signalling value of strategic delay, in accordance with theoretical predictions. We also structurally estimate a version of the screening type bargaining model, adjusted to our context, and find that the model fits both the observed prices and acceptance probabilities well.

Source: Quantitative Economics

DOI: 10.3982/qe655

Authors: Attila Ambrus, Eric Chaney, Igor Salitskiy

Institutions: National Bureau of Economic Research, Duke University, Harvard University, University of Oxford, Vienna University of Economics and Business

Language: English

Topic: Game Theory and Applications

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: diamond

OpenAlex ID: W2132369922

FWCI: 2.382

Cites: 56

Cited by: 30

Related to: 10