2/11/14

How to Negotiate Likeor Againsta Pirate - Facts So Romantic nautil.us

nau til.us

How to Negotiate Likeor Againsta Pirate - Facts So Romantic

2 min read original

https://www.readability.com/articles/rwyhisyx

1/5

2/11/14

How to Negotiate Likeor Againsta Pirate - Facts So Romantic nautil.us

Edward Teach Commonly Calld Black Beard

https://www.readability.com/articles/rwyhisyx

2/5

2/11/14

How to Negotiate Likeor Againsta Pirate - Facts So Romantic nautil.us

Good negotiators know that one of the trickies t as pects of their job is the timing of offers . As negotiations grind on, the cos ts of a s talemate ris e on both s ides . Yet if a s ettlement is reached too qu ickly, it is poss ible one s ide has left money on the table, giving in too eas ily, with the other s ide happy to accept. This is tru e whether talks are across a boardroom table, in a us ed-car lot, or in a pirate-hijacked s hip floating in the I ndian Ocean.

I n mid-Janu ary there were confus ed reports abou t the poss ible hijacking of a merchant s hip, the Marzooqah, by Somali pirates . I t now looks as thou gh the pirate attack was actu ally an operation by Eritrean forces , althou gh no one s eem s to know why they boarded the s hip.

Had the Marzooqah been the target of an attack, it wou ld have been the firs t su ccess fu l hijacking by Somali pirates s ince 2012, when approximately US $200 million was paid in rans om to Somali pirates . The following year s aw a big drop in the nu mber of pirate attacks off the coas t of Eas t Africa, a cons equ ence of an international naval effort and the increas ed us e of private, heavily armed s ecurity firm s . Between 2004 and 2012, thes e interventions s teadily redu ced the pirates su ccess rates and rais ed their operating cos ts .

Yet while the nu mber of su ccess fu l hijackings went down, the total income from piracy remained abou t the s ame. Pirates res ponded to the increas e in their cos ts by bargaining harder and rais ing their returns on su ccess fu lly hijacked s hips .

I n an effort to better u nders tand thes e patterns , economis ts with the Economics of Security res earch initiative examined 1 79 hijackings from 2004 to 2012, drawing on interviews with profess ional pirate negotiators in the region. (Apparently the temptation of pirate talk was too powerfu l to res is t: The title of their s tudy is Barrghgaining with Somali Pirates [pdf].) The res earchers fou nd h u ge variations in rans om amou nts and in the length of talks . Some s hip-owners paid a cou ple h u ndred thous and dollars after a few weeks , while other negotiations dragged on for over a year and resu lted in pay-ou ts of s everal million.

https://www.readability.com/articles/rwyhisyx

3/5

2/11/14

How to Negotiate Likeor Againsta Pirate - Facts So Romantic nautil.us

The amou nt of rans om paid and length of negotiations depended on a nu mber of factors . Bigger, more modern s hips fetched higher rans om s than s maller, older s hips . Wellorganized, s ophis ticated pirates , with the infras tru cture to delay s ettlement while negotiations went on, were able to extract higher payou ts than did opportu nis tic amateurs . As in any kind of bus iness , exis ting market conditions proved very important. Pirates had a keen u nders tanding of what the market wou ld bearthe maxim u m amou nt of money recently offered for s imilar s hips . They were als o often privy to s ettlements won by rival gangs and were motivated to do jus t as well, if not better. (I t s eem s that confidentiality provis ions , if they were included, proved difficu lt to enforce.)

Relatively low rans om s were paid after both s hort and long negotiations , with the highes t amou nts paid after intermediate-length talks . Res earchers attribu te this pattern to information as ymmetries . I t can be difficu lt for pirates and s hip-owners to get reliable information abou t one another. I t is in the interes t of s hip-owners to appear too poor to afford a large pay-ou t. At the s ame time, pirates have an incentive to appear wellorganized and patient enou gh to s it ou t a long hau lbu t not too long. Cos ts for both parties go u p the longer negotiations continu e. The s hips valu e decreas es as it s its in the water. Cargo deteriorates , su pplies are consu med and barnacles grow on the h u ll. Pirates als o end u p s pending more on fees to local militias , protecting the s hip from rival gangs and law-enforcement agencies , feeding hos tages after their su pplies ru n ou t, dies el fu el needed to maintain the s hips des alination equ ipment to jprodu ce drinking water, and even maintaining a su pply of fres h khat, a s tim u lant dru g that many pirates us e.

While piracy has decreas ed in the waters arou nd Eas t Africa, it remains a problem the world over. The fu ll annu al economic cos t of naval piracy globally is es timated to be abou t $1 .5 billion. The I nternational Maritime B ureau s Live Piracy Map s hows a nu mber of attacks in progress . Better u nders tanding the economics and incentives of piracy might help au thorities make it a bad deal for wou ld-be pirates .

Jeanette Bicknell, Ph. D., i s the au thor of Why Mus ic Moves Us ( 2009). She live s in Tor onto, Canada.

https://www.readability.com/articles/rwyhisyx

4/5

2/11/14

How to Negotiate Likeor Againsta Pirate - Facts So Romantic nautil.us

Original URL:

http://nautil.us /blog/ho w-to-negotiate-likeo r-again s ta-pi rate

https://www.readability.com/articles/rwyhisyx

5/5