Pirational choice: The economics of infamous pirate practices

Abstract

This paper investigates the economics of infamous pirate practices. Two closely related economic theories-the theory of signaling and the theory of reputation building-explain these practices. First, I examine the pirate ‡ag, "Jolly Roger," which pirates used to signal their identity as unconstrained outlaws, enabling them to take prizes without costly con ‡ict. Second, I consider how pirates combined heinous torture, public displays of "madness," and published advertisement of their …endishness to establish a reputation as "hair triggers" that prevented costly captive behaviors. Pirates' infamous practices reduced their criminal enterprise's costs and increased its revenues, enhancing the pro…tability of life "on the account."

Was privateering plunder efficient?

“…On the ways in which pirates sought to overcome the informational asymmetry regarding their strength and identity vis-à-vis merchantmen in the 18th century see,Leeson (2010b).…”

Virtual world order: the economics and organizations of virtual pirates

“…Pirates are not cultivating bad reputations in order to scare away potential attackers (Schelling 1978); instead they lose security standing, are outlawed, and become ''free game''. Virtual pirates gain no tactical advantage from a conflict-loving reputation, as do real-world pirates flying a black skull-and-crossbones flag (Leeson 2010): given the game's mechanics they never have the chance to take prizes without fighting.…”

“…Virtual pirates are like real pirates or prison inmates in that they resort coolly to violence for a living. But first, unlike their realworld counterparts who ultimately can be thought of as conflict-averse (Leeson 2007(Leeson , 2010, virtual pirates are found to be conflict-loving. In deriving utility from conflict and fighting parties with whom they have long-standing hostilities, virtual pirates are similar to hooligans-a tough real-world case for emergent order (Leeson, Smith and Snow 2012).…”

The calculus of piratical consent: the myth of the myth of social contract

“…The reason for this is simple enough. Pirates lived and worked together in societies that required their members' cooperation for individuals to achieve their goal: profit through coordinated plunder (Leeson 2008a). To successfully plunder merchant ships, individual pirates had to coordinate the activities of their ship's crews.…”

“…Others were not compelled to do so but could not enjoy the perquisites of social membership, such as voting rights, until they did (Rediker 2004: 79-81). As Leeson (2008aLeeson ( , 2008b points out, pirate conscription was relatively rare since forced men tended to upset the social harmony pirates' private system of governance relied on and could be the undoing of a pirate company if they escaped or sabotaged their captors. But even the presence of conscripts in some pirate crews doesn't undermine the unanimity underlying many pirate constitutions at their inception.…”