IDEAS home Printed from
   My bibliography  Save this paper

Incentives in Merchant Empires: Portuguese and Dutch Labor Compensation


  • Rei, Claudia


The different organizational structure of the Portuguese and Dutch merchant empires affected their ability to monitor workers. I test the theoretical implications of these differences using micro data of overseas workers' compensation from the sixteenth to the eighteenth century. The two merchant empires used significantly different compensation structures: working for the king of Portugal corresponded to a higher bonus share of compensation on average than that of the Dutch East India Company. These results are consistent with theoretical implications and provide additional support to the historical evidence we have on the organizational structure of merchant empires.

Suggested Citation

  • Rei, Claudia, 2011. "Incentives in Merchant Empires: Portuguese and Dutch Labor Compensation," MPRA Paper 28712, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:28712

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    1. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-620, September.
    2. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    3. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
    4. Murphy, Kevin J., 2000. "Performance standards in incentive contracts," Journal of Accounting and Economics, Elsevier, vol. 30(3), pages 245-278, December.
    5. Rei, Claudia, 2011. "The organization of Eastern merchant empires," Explorations in Economic History, Elsevier, vol. 48(1), pages 116-135, January.
    6. Hejeebu, Santhi, 2005. "Contract Enforcement in the English East India Company," The Journal of Economic History, Cambridge University Press, vol. 65(02), pages 496-523, June.
    7. Kevin H. O'Rourke & Jeffrey G. Williamson, 2009. "Did Vasco da Gama matter for European markets? -super-1," Economic History Review, Economic History Society, vol. 62(3), pages 655-684, August.
    8. Carlos, Ann M, 1992. "Principal-Agent Problems in Early Trading Companies: A Tale of Two Firms," American Economic Review, American Economic Association, vol. 82(2), pages 140-145, May.
    9. de Vries,Jan & van der Woude,Ad, 1997. "The First Modern Economy," Cambridge Books, Cambridge University Press, number 9780521570619, May.
    10. de Vries,Jan & van der Woude,Ad, 1997. "The First Modern Economy," Cambridge Books, Cambridge University Press, number 9780521578257, May.
    11. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    12. Alan B. Krueger, 1991. "Ownership, Agency, and Wages: An Examination of Franchising in the Fast Food Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 106(1), pages 75-101.
    13. Joanne Salop & Steven C. Salop, 1976. "Self-selection and turnover in the labor market," Special Studies Papers 80, Board of Governors of the Federal Reserve System (U.S.).
    14. Robert Gibbons, 1996. "Incentives and Careers in Organizations," NBER Working Papers 5705, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Claude Rei, 2014. "Careers and wages in the Dutch East India Company," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 8(1), pages 27-48, January.

    More about this item


    Merchant Empires; Labor Compensation; Incentives; Monitoring;

    JEL classification:

    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:28712. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.