Tuesday, December 4, 2012

Somali Piracy

The German Institute for Economic Research (DIW Berlin) published a report in November 2012 titled "Barrgh-gaining with Somali Pirates." The authors are Olaf J. de Groot, DIW Berlin, and Matthew D. Rablen and Anja Shortland, both of Brunel University.

The study concludes that ransoms paid to Somali pirates are drifting upward and negotiation times are increasing, yet there is huge variation in bargaining outcomes across ship owners. The authors found that ransom amounts and negotiation length depend on the observable characteristics of both pirates and ships and on the reference ransom established by previous ransom payments for a specific ship type. International naval enforcement efforts have driven up the ransom amounts.

Click here to read the report.

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