Guha, Brishti; Guha, Ashok S. - In: Economics Letters 111 (2011) 2, pp. 147-150
Even where all agents are risk-neutral, merchants can insure themselves against piracy. Such self-insurance is surprisingly invulnerable to moral hazard. Further, there exist a patrolling intensity and/or penalties for captured pirates which, along with mercantile self-insurance, could eliminate...