A Simple Hostage Model of Identity

14 Pages Posted: 30 Apr 2020

Date Written: April 6, 2020

Abstract

This paper outlines a simple hostage model of identity, where the hostage is itself an information asset put at risk of exploitation. These information assets—identity attributes of the posting party—are either executed or revealed to the wider world in the event of ex-post opportunism. Credible commitments, of which hostages are one sort, constrain behaviour by making it more profitable for trading partners to follow through on their promises rather than renege. Identity attributes described in this model are used in n-sided interactions to price goods and services, as well as impose sanctions.

Keywords: credible commitment, hostage, new institutional economics, economics of identity, private ordering

JEL Classification: D80, D86

Suggested Citation

Berg, Alastair, A Simple Hostage Model of Identity (April 6, 2020). Available at SSRN: https://ssrn.com/abstract=3569447 or http://dx.doi.org/10.2139/ssrn.3569447

Alastair Berg (Contact Author)

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

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