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Quality, experience, and monopoly: the Soviet market for weapons under Stalin

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  • ANDREI MARKEVICH
  • MARK HARRISON

Abstract

Monopoly is a particular problem in markets where experience goods are traded, since the consumer cannot respond to bad experiences by switching repeat purchases to another supplier. New evidence shows how the defence ministry as buyer in the Soviet market for military goods responded to this problem by investing in an evaluation of quality prior to purchase, by showing reluctance to buy, and by exploiting the available non‐market means to influence the defence industry as supplier. The effectiveness of these stratagems was limited by the defence industry's counteractions and because the buyer had no choice but to come to a compromise with the supplier.

Suggested Citation

  • Andrei Markevich & Mark Harrison, 2006. "Quality, experience, and monopoly: the Soviet market for weapons under Stalin," Economic History Review, Economic History Society, vol. 59(1), pages 113-142, February.
    • Handle: RePEc:bla:ehsrev:v:59:y:2006:i:1:p:113-142
    DOI: 10.1111/j.1468-0289.2005.00334.x
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    References listed on IDEAS

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    1. Mark Harrison & R. W. Davies, 1997. "The Soviet military‐economic effort during the second five‐year plan (1933–1937)," Europe-Asia Studies, Taylor & Francis Journals, vol. 49(3), pages 369-406.
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    8. William P. Rogerson, 1994. "Economic Incentives and the Defense Procurement Process," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 65-90, Fall.
    9. Mark Harrison, 2014. "Soviet Industry and the Red Army Under Stalin: A Military-Industrial Complex?," World Scientific Book Chapters, in: THE ECONOMICS OF COERCION AND CONFLICT, chapter 6, pages 153-173, World Scientific Publishing Co. Pte. Ltd..
    10. Victor P. Goldberg, 1976. "Regulation and Administered Contracts," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 426-448, Autumn.
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    Cited by:

    1. Andrei Markevich, 2011. "How Much Control is Enough? Monitoring and Enforcement under Stalin," Europe-Asia Studies, Taylor & Francis Journals, vol. 63(8), pages 1449-1468.
    2. Harrison, Mark, 2017. "Secrecy and State Capacity: A Look Behind the Iron Curtain," Economic Research Papers 269312, University of Warwick - Department of Economics.
    3. Harrison, Mark & Markevich, Andrei, 2007. "Quantity Versus Quality in the Soviet Market for Weapons," Economic Research Papers 269771, University of Warwick - Department of Economics.
    4. Harrison, Mark, 2011. "Capitalism at War," CAGE Online Working Paper Series 60, Competitive Advantage in the Global Economy (CAGE).

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