Enforcing cooperation among medieval merchants: The Maghribi traders revisited

Harbord, David (2006): Enforcing cooperation among medieval merchants: The Maghribi traders revisited.

Abstract

We revisit Greif's (1993) analysis of trade between the 11th-century Maghribi traders and present two different models which bring into play, in an essential way, historical features of the Maghribi's organization which had no role in Greif's own analysis. Our reformulation of the Maghribi's "punishment strategies" incorporates principal components of their actual historical practice and explains why they may have been necessary to sustain cooperation, especially in the presence of uncertainty or imperfect information. We also model "formal friendships," or trade through bilateral and multilateral partnerships, and predict the Maghribi's practice of providing agency services without pecuniary compensation. We are thus able to provide a richer and more accurate picture of how that organization facilitated trade between widely-dispersed traders in the absence of a reliable legal system to enforce merchant contracts.

• Item Type: MPRA Paper
• Institution: Market Analysis Ltd
• Language: English
• Keywords: cooperation; enforcement; trade; institutions
• Subjects: J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Labor Contracts; N - Economic History > N7 - Transport, Trade, Energy, Technology, and Other Services > N75 - Asia including Middle East; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior ; Transaction Costs ; Property Rights

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