I read a lot of news and academic articles about bargaining and It’s not every day I come across an article about bargaining with pirates though. A massive study with data on 10,000 negotations with pirates from 1575 to 1739 found that dragging out negotiations put the pirates at a disadvantage and gained better terms for the families of the hostages.
Unfortunately the world is not the same today as it was in 1739. Game theory has truly taken over the temporary detainment of shipping business with pirates acting smart and shipowners acting poor to try to trick the other side. Instead of dragging out negotiations, both sides are trying to wrap things up quickly so they can move on with their lives – saving on opportunity costs, spoiling, wages, etc. on both sides.
My favorite part is towards the end when they talk about Spain paying $1.2 million for a fishing boat that was captured, “setting a new price floor.”