Empire-building and Price competition
AbstractThis paper is among the first to theoretically examine the relevance of price competition in the protection market by focusing on the competition between empires. By distinguishing absolute and differential protection rents, we first define coercive rivalry and price competition among empires and then establish three types of empires: early empires of domination (like Akkadian empire), territorial empires (like Russian empire), and merchant empires (like Venetian empire). Empires are structured on the basis of two types of hierarchies that determine their protection costs: ‘top-down’ and ‘bottom-up.’ We systematically study the impact of asymmetrical protection costs on price competition in the light of Bertrand equilibria. We provide an economic rationale for the use of violence throughout history in conformity with the findings of economic historians.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 48225.
Date of creation: Mar 2013
Date of revision: Apr 2013
Absolute and differential protection rents; Bertrand equilibrium; Empires of domination; Merchant empires; Territorial Empires;
Other versions of this item:
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-20 (All new papers)
- NEP-CIS-2013-07-20 (Confederation of Independent States)
- NEP-COM-2013-07-20 (Industrial Competition)
- NEP-HIS-2013-07-20 (Business, Economic & Financial History)
- NEP-IND-2013-07-20 (Industrial Organization)
- NEP-MIC-2013-07-20 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kai Konrad & Stergios Skaperdas, 2012.
"The market for protection and the origin of the state,"
Springer, vol. 50(2), pages 417-443, June.
- Kai A. Konrad & Stergios Skaperdas, 2005. "The Market for Protection and the Origin of the State," CESifo Working Paper Series 1578, CESifo Group Munich.
- Konrad, Kai A. & Skaperdas, Stergios, 2012. "The market for protection and the origin of the state," Munich Reprints in Economics 13961, University of Munich, Department of Economics.
- Konrad, Kai A & Skaperdas, Stergios, 1999. "The Market for Protection and the Origin of the State," CEPR Discussion Papers 2173, C.E.P.R. Discussion Papers.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
- Richard E. Levitan & Martin Shubik, 1970.
"Price Duopoly and Capacity Constraints,"
Cowles Foundation Discussion Papers
287, Cowles Foundation for Research in Economics, Yale University.
- Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-58, August.
- Wittman, Donald, 1991. "Nations and States: Mergers and Acquisitions; Dissolutions and Divorce," American Economic Review, American Economic Association, vol. 81(2), pages 126-29, May.
- Carl Davidson & Raymond Deneckere, 1986. "Long-Run Competition in Capacity, Short-Run Competition in Price, and the Cournot Model," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 404-415, Autumn.
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
- Friedman, David, 1977. "A Theory of the Size and Shape of Nations," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 59-77, February.
- Ames, Edward & Rapp, Richard T., 1977. "The Birth and Death of Taxes: A Hypothesis," The Journal of Economic History, Cambridge University Press, vol. 37(01), pages 161-178, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.