Empire-building and price competition
While economic historians have stressed the importance of price competition in the protection market, theorists of conflictual activity have argued against the extrapolation of this form of competition in the protection market and favored competition through the quantity of conflictual effort. We purport to show 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, namely early empires of domination, territorial empires and merchant empires. Empires are structured on the basis of two types of hierarchies: “top-down” and “bottom-up” that determine their protection costs. 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.
|Date of creation:||14 Feb 2013|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Corchón, Luis C. & Dahm, Matthias, 2007.
"Foundations for contest success functions,"
UC3M Working papers. Economics
we070401, Universidad Carlos III de Madrid. Departamento de Economía.
- Herschel I. Grossman & Juan Mendoza, 2001. "Annexation or Conquest? The Economics of Empire Building," NBER Working Papers 8109, National Bureau of Economic Research, Inc.
- 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.
- Skaperdas, S., 1991.
"Cooperation, Conflict And Power In The Absence Of Property Rights,"
90-91-06a, California Irvine - School of Social Sciences.
- Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-739, September.
- Skaperdas, Stergios, 2003.
"Restraining the genuine homo economicus: why the economy cannot be divorced from its governance
[Die Beschränkung des genuinen Homo Economicus: Warum wirtschaftliche Prozesse und Governancestruktur," Discussion Papers, Research Unit: Market Processes and Governance SP II 2003-03, Social Science Research Center Berlin (WZB).
- Stergios Skaperdas, 2003. "Restraining the Genuine Homo Economicus: Why the Economy Cannot Be Divorced from Its Governance," Economics and Politics, Wiley Blackwell, vol. 15(2), pages 135-162, 07.
- Stergios Skaperdas, 2003. "Restraining the Genuine Homo Economicus: Why the Economy Cannot be Divorced from its Governance," CESifo Working Paper Series 901, CESifo Group Munich.
- Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-858, August.
- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
- Jack Hirshleifer, 2000. "The Macrotechnology of Conflict," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 773-792, December.
- Kai Konrad & Stergios Skaperdas, 2012.
"The market for protection and the origin of the state,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(2), pages 417-443, June.
- 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.
- Kai A. Konrad & Stergios Skaperdas, 2005. "The Market for Protection and the Origin of the State," CESifo Working Paper Series 1578, CESifo Group Munich.
- Domar, Evsey D., 1970. "The Causes of Slavery or Serfdom: A Hypothesis," The Journal of Economic History, Cambridge University Press, vol. 30(01), pages 18-32, March.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, September.
- 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.
- Buchanan, James M & Faith, Roger L, 1987. "Secession and the Limits of Taxation: Toward a Theory of Internal Exit," American Economic Review, American Economic Association, vol. 77(5), pages 1023-1031, December.
- Mehrdad Vahabi, 2010. "Integrating social conflict into economic theory," Cambridge Journal of Economics, Oxford University Press, vol. 34(4), pages 687-708.
- Wittman, Donald, 1991. "Nations and States: Mergers and Acquisitions; Dissolutions and Divorce," American Economic Review, American Economic Association, vol. 81(2), pages 126-129, May.
- Lane, Frederic C., 1975. "The Role of Governments in Economic Growth in Early Modern Times," The Journal of Economic History, Cambridge University Press, vol. 35(01), pages 8-17, March.
- Levitan, Richard & Shubik, Martin, 1972.
"Price Duopoly and Capacity Constraints,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(1), pages 111-122, February.
- Mehrdad Vahabi, 2004. "The Political Economy of Destructive Power," Books, Edward Elgar Publishing, number 3481.
- J. Bradford De Long & Andrei Shleifer, 1993.
"Princes and Merchants: European City Growth before the Industrial Revolution,"
NBER Working Papers
4274, National Bureau of Economic Research, Inc.
- De Long, J Bradford & Shleifer, Andrei, 1993. "Princes and Merchants: European City Growth before the Industrial Revolution," Journal of Law and Economics, University of Chicago Press, vol. 36(2), pages 671-702, October.
- De Long, J. Bradford & Shleifer, Andrei, 1993. "Princes and Merchants: European City Growth before the Industrial Revolution," Scholarly Articles 3451302, Harvard University Department of Economics.
- Neary, Hugh M, 1997. "Equilibrium Structure in an Economic Model of Conflict," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 480-494, July.
- 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.
- Herschel I. Grossman & Juan Mendoza, 2001. "Butter and guns: Complementarity between economic and military competition," Economics of Governance, Springer, vol. 2(1), pages 25-33, 03.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:44368. 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)
If references are entirely missing, you can add them using this form.