Eric Barker excerpts a study on pirate economics from the Journal of Economic Behavior and Organization:
First, I examine the pirate flag, "Jolly Roger," which pirates used to signal their identity as unconstrained outlaws, enabling them to take prizes without costly conflict. Second, I consider how pirates combined heinous torture, public displays of "madness," and published advertisement of their fiendishness to establish a reputation that prevented costly captive behaviors. Pirates' infamous practices reduced their criminal enterprise's costs and increased its revenues, enhancing the profitability of life "on the account."
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