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KidnapInside the Ransom Business$
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Anja Shortland

Print publication date: 2019

Print ISBN-13: 9780198815471

Published to Oxford Scholarship Online: January 2019

DOI: 10.1093/oso/9780198815471.001.0001

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The Price of a Life

The Price of a Life

Chapter:
(p.107) 6 The Price of a Life
Source:
Kidnap
Author(s):

Anja Shortland

Publisher:
Oxford University Press
DOI:10.1093/oso/9780198815471.003.0006

Ransom discipline is paramount for kidnap insurance and provides wider social benefits. Outsize ransoms can trigger a vicious cycle of kidnappings, hostage abuse, and ransom inflation. Crisis responders have developed a robust bargaining protocol to stabilize ransoms and incentivize cooperative behaviour by kidnappers. Kidnappers only release hostages when they think they have extracted the maximum available ransom. This requires that hostage stakeholders send psychologically costly signals to convince kidnappers that their funds are exhausted. However, if hostage stakeholders believe that there is a trade-off between time and money in a hostage negotiation, the bargaining protocol creates the (false) impression of a principal–agent problem between professional negotiators and stakeholders. Managing the resulting suspicion and distrust is as important as shaping the negotiation with the kidnappers.

Keywords:   ransom discipline, price formation, signalling theory, anarchic bargaining, threats, principal–agent problems

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