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Between the constitution and the deep blue sea: Contractual controls on opportunism aboard pirate vessels

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  • Gary Anderson
  • Adam Gifford

Abstract

When contracting is costly, members of a production team will seek assurance that the transaction-pecific investments they make will be protected. The institutional framework created by a firm in such a setting can be considered a constitution. Under some circumstances, firms will create explicit written constitutions. The constitutions of pre-1850 privateer and pirate vessels provide two examples of actual written constitutions. These constitutions were designed to resolve the problems of contractual opportunism created by the specific investments of the crewmembers. Privateering was a legal and state-sanctioned activity whereas pirates engaged in illegal activities; aside from this difference their activities were virtually identical. This contrast allows for the examination of an interesting question: specifically, what effect does the constitutional backup provided by the state have on the constitutional structure of the firm? Copyright Kluwer Academic Publishers 1996

Suggested Citation

  • Gary Anderson & Adam Gifford, 1996. "Between the constitution and the deep blue sea: Contractual controls on opportunism aboard pirate vessels," Constitutional Political Economy, Springer, vol. 7(1), pages 49-61, March.
    • Handle: RePEc:kap:copoec:v:7:y:1996:i:1:p:49-61
    DOI: 10.1007/BF00143479
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    References listed on IDEAS

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    Cited by:

    1. Horst Hegmann, 1997. "Differing World-Views and Collective Action: The Case of Research," Constitutional Political Economy, Springer, vol. 8(3), pages 179-194, September.

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    More about this item

    Keywords

    D23;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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