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Empire-building and Price competition

Antoine Pietri (), Tarik Tazdaït and Mehrdad Vahabi

MPRA Paper from University Library of Munich, Germany

Abstract: This paper is among the first to theoretically examine 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: early empires of domination (like Akkadian empire), territorial empires (like Russian empire), and merchant empires (like Venetian empire). Empires are structured on the basis of two types of hierarchies that determine their protection costs: ‘top-down’ and ‘bottom-up.’ 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.

Keywords: Absolute and differential protection rents; Bertrand equilibrium; Empires of domination; Merchant empires; Territorial Empires (search for similar items in EconPapers)
JEL-codes: D74 H11 H56 L13 P16 (search for similar items in EconPapers)
Date: 2013-03, Revised 2013-04
New Economics Papers: this item is included in nep-cis, nep-com, nep-his, nep-ind and nep-mic
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Related works:
Working Paper: Empire-building and Price Competition (2014) Downloads
Working Paper: Empire-Building and Price Competition (2013)
Working Paper: Empire Building and Price Competition (2013)
Working Paper: Empire-building and price competition (2013) Downloads
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