Coordination, compensation and the expansion of trade: The merchant guilds revisited

David Harbord and Nils Henrik von der Fehr

MPRA Paper from University Library of Munich, Germany

Abstract: Greif, Milgrom and Weingast (1994) argued that the ability of the merchant guilds to encourage trade expansion required an internal mechanism to enforce compliance to trade embargoes, otherwise credible incentives for "embargo breaking" would have rendered them ine¤ectual. We show that sustaining e¢ cient trade implied an ability of the guilds to restrict their membership but no internal enforcement mechanism was necessary. Our reformulation of the guilds´ strategies - based on the historical evidence - makes trade embargoes self-enforcing and allows us to provide a richer picture of how the guilds could have facilitated trade expansion by controlling merchant trading activities.

Keywords: medieval trade; coordination; guilds (search for similar items in EconPapers)
JEL-codes: C72 D23 N73 (search for similar items in EconPapers)
Date: 2011-10
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