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The Economics of Empire-Building: Predatory and Price Competitions

Author

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  • Antoine Pietri
  • Tarik Tazdaït
  • Mehrdad Vahabi

Abstract

We build a theoretical framework consistent with historical evidence in which empire-building is explained by price and predatory competitions on the market for protection. We explore how the assets structure possessed by the buyers of protection influences the nature of protection and in fine the size of empires. Our main contribution is to introduce a distinction between two types of rent, namely an "absolute" and a "differential" one. The first corresponds to rents extracted by empires using threats and coercion; the second, to economic advantages conferred on subjects of an empire.

Suggested Citation

  • Antoine Pietri & Tarik Tazdaït & Mehrdad Vahabi, 2017. "The Economics of Empire-Building: Predatory and Price Competitions," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 173(2), pages 253-278, June.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201706)173:2_253:teoepa_2.0.tx_2-8
    DOI: 10.1628/093245616X14659946859954
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    Cited by:

    1. Mehrdad Vahabi, 2016. "A positive theory of the predatory state," Public Choice, Springer, vol. 168(3), pages 153-175, September.
    2. Antoine Pietri, 2017. "Les modèles de « rivalité coercitive » dans l’analyse économique des conflits," Revue d'économie politique, Dalloz, vol. 127(3), pages 307-352.

    More about this item

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • 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

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