IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v160y2014i3p481-499.html
   My bibliography  Save this article

Kidnap insurance and its impact on kidnapping outcomes

Author

Listed:
  • Alexander Fink
  • Mark Pingle

Abstract

In the developing world, kidnapping is relatively common, and a market for kidnap insurance has arisen in response. We provide a model that allows us to analyze how kidnap insurance affects the interaction between the kidnapper and the victim’s family when both are self-interested and have complete knowledge. We find that a market for kidnap insurance can be supported because it benefits a risk-averse family, as long as the introduction of insurance does not increase the risk of kidnapping too much. Families should fully insure if purchasing insurance does not increase the probability of kidnapping, and partially insure otherwise. Kidnapping insurance allows families to redeem hostages from kidnappers with a greater willingness to kill, which may reduce the number of kidnapping fatalities as long as the insurance does not increase the risk of kidnapping too much. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Alexander Fink & Mark Pingle, 2014. "Kidnap insurance and its impact on kidnapping outcomes," Public Choice, Springer, vol. 160(3), pages 481-499, September.
    • Handle: RePEc:kap:pubcho:v:160:y:2014:i:3:p:481-499
    DOI: 10.1007/s11127-013-0108-4
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11127-013-0108-4
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11127-013-0108-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Atkinson, Scott E & Sandler, Todd & Tschirhart, John, 1987. "Terrorism in a Bargaining Framework," Journal of Law and Economics, University of Chicago Press, vol. 30(1), pages 1-21, April.
    2. Khusrav Gaibulloev & Todd Sandler, 2009. "Hostage Taking: Determinants of Terrorist Logistical and Negotiation Success," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(6), pages 739-756, November.
    3. Rony Pshisva & Gustavo A. Suárez F., 2006. "Captive Markets: the Impact of Kidnappings on Corporate Investment in Colombia," Coyuntura Económica, Fedesarrollo, June.
    4. Rony Pshisva & Gustavo A. Suarez, 2006. "'Captive markets': the impact of kidnappings on corporate investment in Colombia," Finance and Economics Discussion Series 2006-18, Board of Governors of the Federal Reserve System (U.S.).
    5. Lapan, Harvey E & Sandler, Todd, 1988. "To Bargain or Not to Bargain: That Is the Question," American Economic Review, American Economic Association, vol. 78(2), pages 16-21, May.
    6. Vannini Marco & Claudio Detotto & Bryan Mccannon, 2015. "« Ransom Kidnapping »," Post-Print hal-01289362, HAL.
    7. Brandt, Patrick T. & Sandler, Todd, 2009. "Hostage taking: Understanding terrorism event dynamics," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 758-778, September.
    8. Catherine Rodriguez & Edgar Villa, 2012. "Kidnap risks and migration: evidence from Colombia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 1139-1164, July.
    9. Bertrand Crettez & Régis Deloche, 2009. "A cliometric analysis of the Aldo Moro kidnapping and assassination," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 3(2), pages 123-139, June.
    10. Todd Sandler & John L. Scott, 1987. "Terrorist Success in Hostage-Taking Incidents," Journal of Conflict Resolution, Peace Science Society (International), vol. 31(1), pages 35-53, March.
    11. Leeson, Peter T. & Nowrasteh, Alex, 2011. "Was privateering plunder efficient?," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 303-317, August.
    12. M. Vannini & B. Mccannon & C. Detotto, 2012. "Understanding Ransom Kidnapping and Its Duration," Working Paper CRENoS 201219, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    13. Charlinda Santifort & Todd Sandler, 2013. "Terrorist success in hostage-taking missions: 1978–2010," Public Choice, Springer, vol. 156(1), pages 125-137, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Akintunde Thomas Bolanle & Adelana Joel Oluwasogo & Adeyemi Olabisi Omowumi, 2023. "Factors Contributing to Insecurity in Sub Saharah Africa," International Journal of Latest Technology in Engineering, Management & Applied Science, International Journal of Latest Technology in Engineering, Management & Applied Science (IJLTEMAS), vol. 12(08), pages 26-32, August.
    2. Brandt, Patrick T. & George, Justin & Sandler, Todd, 2016. "Why concessions should not be made to terrorist kidnappers," European Journal of Political Economy, Elsevier, vol. 44(C), pages 41-52.
    3. Akintunde Thomas Bolanle & Adelana Joel Oluwasogo & Adeyemi Olabisi Omowumi, 2023. "The Prevalence Insecurity Issues in Ibarapa North Local Government, Oyo State, Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(8), pages 78-85, August.
    4. Wukki Kim & Justin George & Todd Sandler, 2021. "Introducing Transnational Terrorist Hostage Event (TTHE) Data Set, 1978 to 2018," Journal of Conflict Resolution, Peace Science Society (International), vol. 65(2-3), pages 619-641, February.
    5. Godwin Okafor & Obiajulu Ede, 2023. "Kidnapping rate and capital flight: Empirical evidence from developing countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2590-2606, July.
    6. Kim, Wukki & Sandler, Todd, 2021. "Duration and competing-risks determinants of terrorist hostage-taking incidents," European Journal of Political Economy, Elsevier, vol. 70(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brandt, Patrick T. & George, Justin & Sandler, Todd, 2016. "Why concessions should not be made to terrorist kidnappers," European Journal of Political Economy, Elsevier, vol. 44(C), pages 41-52.
    2. M. Vannini & B. Mccannon & C. Detotto, 2012. "Understanding Ransom Kidnapping and Its Duration," Working Paper CRENoS 201219, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    3. Brandt, Patrick T. & Sandler, Todd, 2009. "Hostage taking: Understanding terrorism event dynamics," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 758-778, September.
    4. Kerim Peren Arin & Eberhard Feess & Torben Kuhlenkasper & Otto F. M. Reich, 2019. "Negotiating with Terrorists: The Costs of Compliance," Southern Economic Journal, John Wiley & Sons, vol. 86(1), pages 305-317, July.
    5. Kim, Wukki & Sandler, Todd, 2021. "Duration and competing-risks determinants of terrorist hostage-taking incidents," European Journal of Political Economy, Elsevier, vol. 70(C).
    6. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June.
    7. Detotto Claudio & McCannon Bryan C. & Vannini Marco, 2014. "Understanding Ransom Kidnappings and Their Duration," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(3), pages 849-871, July.
    8. Charlinda Santifort & Todd Sandler, 2013. "Terrorist success in hostage-taking missions: 1978–2010," Public Choice, Springer, vol. 156(1), pages 125-137, July.
    9. Sylvain Baumann, 2009. "Protection and technology transfer against a terrorist threat," Post-Print hal-02311532, HAL.
    10. repec:ebl:ecbull:eb-09-00572 is not listed on IDEAS
    11. Sylvain Baumann, 2018. "Protection, Technological Transfer and Alliance against Terrorist Conflict," Post-Print hal-02949083, HAL.
    12. Terrence August & Duy Dao & Marius Florin Niculescu, 2022. "Economics of Ransomware: Risk Interdependence and Large-Scale Attacks," Management Science, INFORMS, vol. 68(12), pages 8979-9002, December.
    13. Olaf J. de Groot & Matthew D. Rablen & Anja Shortland, 2012. "Barrgh-gaining with Somali Pirates," Economics of Security Working Paper Series 74, DIW Berlin, German Institute for Economic Research.
    14. Margaret A. Wilson, 2000. "Toward a Model of Terrorist Behavior in Hostage-Taking Incidents," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(4), pages 403-424, August.
    15. Dwight Lee & Todd Sandler, 1989. "On the optimal retaliation against terrorists: The paid-rider option," Public Choice, Springer, vol. 61(2), pages 141-152, May.
    16. Sylvain Baumann & Pedro Lages dos santos & Samir Amine & Fabrice Valognes, 2009. "Protection, Alliance and Negotiation against a Terrorist Threat," Economics Bulletin, AccessEcon, vol. 29(4), pages 3214-3221.
    17. Bruno S. Frey & Simon Luechinger, "undated". "Terrorism: Deterrence May Backfire," IEW - Working Papers 136, Institute for Empirical Research in Economics - University of Zurich.
    18. Shortland, Anja & Vothknecht, Marc, 2011. "Combating “maritime terrorism” off the coast of Somalia," European Journal of Political Economy, Elsevier, vol. 27(S1), pages 133-151.
    19. Meierrieks, Daniel & Renner, Laura, 2021. "Islamist terrorism and the role of women," Discussion Paper Series 2021-02, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.
    20. Rozo, Sandra V., 2020. "Unintended effects of illegal economic activities: Illegal gold mining and malaria," World Development, Elsevier, vol. 136(C).
    21. Dirk Rubbelke, 2005. "Differing motivations for terrorism," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(1), pages 19-27.

    More about this item

    Keywords

    Kidnapping; Insurance; Unintended consequences; Fatalities from kidnappings; G22; C72; K4;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:160:y:2014:i:3:p:481-499. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.