Abstract

http://ssrn.com/abstract=1954149
 
 

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Pirates of the Mediterranean: An Empirical Investigation of Bargaining with Transaction Costs


Attila Ambrus


Duke University - Department of Economics

Eric J. Chaney


Harvard University - Department of Economics

Igor Salitskiy


affiliation not provided to SSRN

December 22, 2011

Economic Research Initiatives at Duke (ERID) Working Paper No. 115

Abstract:     
This paper uses ransom prices and time to ransom for over 10,000 captives rescued from two Barbary strongholds to investigate the empirical relevance of dynamic bargaining models with one-sided asymmetric information in ransoming settings. We observe both multiple negotiations that were ex ante similar from the uninformed party’s (seller’s) point of view, and information that only the buyer knew. Through reduced form analysis, we test some common qualitative predictions of dynamic bargaining models. We also structurally estimate the model in Cramton (1991), to compare negotiations in different Barbary strongholds. Our estimates suggest that the historical bargaining institutions were remarkably efficient, despite the presence of substantial asymmetric information.

Number of Pages in PDF File: 48

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Date posted: November 4, 2011 ; Last revised: January 7, 2012

Suggested Citation

Ambrus, Attila and Chaney, Eric J. and Salitskiy, Igor, Pirates of the Mediterranean: An Empirical Investigation of Bargaining with Transaction Costs (December 22, 2011). Economic Research Initiatives at Duke (ERID) Working Paper No. 115. Available at SSRN: http://ssrn.com/abstract=1954149

Contact Information

Attila Ambrus (Contact Author)
Duke University - Department of Economics ( email )
100 Fuqua Drive
Durham, NC 27708-0204
United States
Eric J. Chaney
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
Igor Salitskiy
affiliation not provided to SSRN ( email )
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