Extortion

Extortion of productive enterprises ('shops') by organized crime groups ('gangs') takes place in virtually all economies. We develop a framework to study this activity. The main harm of extortion comes from the long-run erosion and distortion of useful production, as well as from...

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Bibliographic Details
Published inEconomica (London) Vol. 65; no. 260; pp. 461 - 477
Main Authors Konrad, Kai I., Skaperdas, Stergios
Format Journal Article
LanguageEnglish
Published Oxford, UK and Boston, USA Blackwell Publishers Ltd 01.11.1998
The Suntory-Toyota International Centre for Economics and Related Disciplines
T. Fisher Unwin
Blackwell Publishing Ltd
Subjects
Corruption
Economic competition
Economic models
Equilibrium
Extortion
Gangs
Logical givens
Mathematical economics
Organized crime
Police
Policing
Political economy
Shopkeepers
Street gangs
Studies
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Summary:Extortion of productive enterprises ('shops') by organized crime groups ('gangs') takes place in virtually all economies. We develop a framework to study this activity. The main harm of extortion comes from the long-run erosion and distortion of useful production, as well as from the destruction of property that we show can occur in equilibrium. Among other results, we also find: gangs may increase their activity in response to increased police protection; often, but not always, forward-looking gangs induce lower resource waste than myopic gangs.
Bibliography:ark:/67375/WNG-24XHKD96-D
ArticleID:ECCA141
istex:37B583BB4F77C3C2071084D2BAB95C741E4A06C7
ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0013-0427
1468-0335
DOI:10.1111/1468-0335.00141