Year: 1998
Type: article
Abstract: Extortion of productive enterprises (‘shops’) by organized crime groups (‘gangs’) takes place in virtually all economies. We develop a framework to study this activity. The main harm of extortion comes from the long‐run erosion and distortion of useful production, as well as from the destruction of property that we show can occur in equilibrium. Among other results, we also find: gangs may increase their activity in response to increased police protection; often, but not always, forward‐looking gangs induce lower resource waste than myopic gangs.
Source: Economica
Authors: Kai I. Konrad, Stergios Skaperdas
Institutions: Freie Universität Berlin, University of California, Irvine
Language: English
Subfield: Sociology and Political Science
Field: Social Sciences
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4244085883