ABSTRACT
This chapter discusses the economics of international cooperation against maritime piracy. It begins with a short description of the cost of maritime piracy and describes international investment in enforcement against it. Next, pirate organization and a pirate business model are discussed, along with a brief discussion of what policies may be adopted to reduce piracy. Interactions between pirates and enforcement agents are then modeled in an equilibrium framework. It is then pointed out that as enforcement on the high seas is a mixed good – enforcement effort by country X also benefiting country Y – a free rider problem exists, and there will be under-investment in enforcement.
