IDEAS home Printed from https://ideas.repec.org/a/wly/iecrev/v64y2023i1p23-56.html
   My bibliography  Save this article

Medieval Matching Markets

Author

Listed:
  • Lars Boerner
  • Daniel Quint

Abstract

We study the regulation of brokerage in wholesale markets in premodern Central Western Europe. Examining 1,804 sets of rules from 82 cities, we find brokerage was primarily a centralized matchmaking mechanism. Brokerage was more common in towns with larger populations, better access to sea ports and trade routes, and greater political autonomy. Brokers' fee structures varied systematically: price‐based fees were more common for highly heterogeneous goods, quantity‐based fees for more homogeneous goods. We show theoretically that this was broadly consistent with total surplus maximization, and that brokerage was more valuable in markets with unequal numbers of buyers and sellers.

Suggested Citation

  • Lars Boerner & Daniel Quint, 2023. "Medieval Matching Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 23-56, February.
    • Handle: RePEc:wly:iecrev:v:64:y:2023:i:1:p:23-56
    DOI: 10.1111/iere.12600
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/iere.12600
    Download Restriction: no
    File URL: https://libkey.io/10.1111/iere.12600?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alvin E. Roth, 2009. "What Have We Learned from Market Design?," Innovation Policy and the Economy, University of Chicago Press, vol. 9(1), pages 79-112.
    2. Paul R. Milgrom & Douglass C. North & Barry R. Weingast*, 1990. "The Role Of Institutions In The Revival Of Trade: The Law Merchant, Private Judges, And The Champagne Fairs," Economics and Politics, Wiley Blackwell, vol. 2(1), pages 1-23, March.
    3. Daniel F. Spulber, 1996. "Market Microstructure and Intermediation," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 135-152, Summer.
    4. Davide Cantoni & Noam Yuchtman, 2014. "Medieval Universities, Legal Institutions, and the Commercial Revolution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 823-887.
    5. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer.
    6. Muriel Niederle & Alvin E. Roth, 2003. "Unraveling Reduces Mobility in a Labor Market: Gastroenterology with and without a Centralized Match," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1342-1352, December.
    7. Journal of Economics Library, 2016. "New Economics Books," Journal of Economics Library, KSP Journals, vol. 3(2), pages 362-410, June.
    8. Gehrig, Thomas, 1993. "Intermediation in Search Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(1), pages 97-120, Spring.
    9. Lars Boerner & Albrecht Ritschl, 2009. "The Economic History of Sovereignty: Communal Responsibility, the Extended Family, and the Firm," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(1), pages 99-112, March.
    10. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    11. Giovanni Federico, 2012. "How much do we know about market integration in Europe?," Economic History Review, Economic History Society, vol. 65(2), pages 470-497, May.
    12. Journal of Economics Library, 2016. "New Economics Books," Journal of Economics Library, KSP Journals, vol. 3(1), pages 165-213, March.
    13. Davide Cantoni, 2015. "The Economic Effects Of The Protestant Reformation: Testing The Weber Hypothesis In The German Lands," Journal of the European Economic Association, European Economic Association, vol. 13(4), pages 561-598, August.
    14. John Rust & George Hall, 2003. "Middlemen versus Market Makers: A Theory of Competitive Exchange," Journal of Political Economy, University of Chicago Press, vol. 111(2), pages 353-403, April.
    15. Neeman Zvika & Vulkan Nir, 2010. "Markets versus Negotiations: The Predominance of Centralized Markets," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-30, February.
    16. Donna, Javier & Espin-Sanchez, Jose, 2014. "The Illiquidity of Water Markets," MPRA Paper 55078, University Library of Munich, Germany.
    17. John H. Munro, 1998. "The Symbiosis of Towns and Textiles: Urban Institutions and the Changing Fortunes of Cloth Manufacturing in the Low Countries and England, 1280 - 1570," Working Papers munro-98-03, University of Toronto, Department of Economics.
    18. Sheilagh Ogilvie, 2014. "The Economics of Guilds," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 169-192, Fall.
    19. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-950, October.
    20. Daron Acemoglu & Simon Johnson & James Robinson, 2005. "The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth," American Economic Review, American Economic Association, vol. 95(3), pages 546-579, June.
    21. Sheilagh Ogilvie, 2004. "Guilds, efficiency, and social capital: evidence from German proto‐industry," Economic History Review, Economic History Society, vol. 57(2), pages 286-333, May.
    22. Ed Nosal & Yuet‐Yee Wong & Randall Wright, 2015. "More on Middlemen: Equilibrium Entry and Efficiency in Intermediated Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(S2), pages 7-37, June.
    23. Yavas, Abdullah, 1992. "Marketmakers versus matchmakers," Journal of Financial Intermediation, Elsevier, vol. 2(1), pages 33-58, March.
    24. Hickson, Charles R. & Thompson, Earl A., 1991. "A new theory of guilds and european economic development," Explorations in Economic History, Elsevier, vol. 28(2), pages 127-168, April.
    25. Victoria N. Bateman, 2011. "The evolution of markets in early modern Europe, 1350–1800: a study of wheat prices," Economic History Review, Economic History Society, vol. 64(2), pages 447-471, May.
    26. Greif,Avner, 2006. "Institutions and the Path to the Modern Economy," Cambridge Books, Cambridge University Press, number 9780521671347.
    27. Gary Biglaiser, 1993. "Middlemen as Experts," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 212-223, Summer.
    28. Li, Yiting, 1998. "Middlemen and private information," Journal of Monetary Economics, Elsevier, vol. 42(1), pages 131-159, June.
    29. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-518, May.
    30. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    31. repec:ksp:journ5:v:3:y:2016:i:1:p:150-198 is not listed on IDEAS
    32. Yavas, Abdullah, 1994. "Middlemen in Bilateral Search Markets," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 406-429, July.
    33. Munro, John H., 1998. "The symbiosis of towns and textiles: urban institutions and the changing fortunes of cloth manufacturing in the Low Countries and England, 1270 - 1570," MPRA Paper 11266, University Library of Munich, Germany, revised Sep 1998.
    34. Richardson, Gary, 2004. "Guilds, laws, and markets for manufactured merchandise in late-medieval England," Explorations in Economic History, Elsevier, vol. 41(1), pages 1-25, January.
    35. John H. Munro, 2000. "The West European Woollen Industries and their Struggles for International Markets, c.1000 - 1500," Working Papers munro-00-04, University of Toronto, Department of Economics.
    36. Alok Johri & John Leach, 2002. "Middlemen and the Allocation of Heterogeneous Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 347-362, May.
    37. Journal of Economics Library, 2016. "New Economics Books," Journal of Economics Library, KSP Journals, vol. 3(4), pages 664-711, December.
    38. Chilosi, David & Murphy, Tommy E. & Studer, Roman & Tunçer, A. Coşkun, 2013. "Europe's many integrations: Geography and grain markets, 1620–1913," Explorations in Economic History, Elsevier, vol. 50(1), pages 46-68.
    39. Alvin E. Roth & Uriel G. Rothblum, 1999. "Truncation Strategies in Matching Markets--In Search of Advice for Participants," Econometrica, Econometric Society, vol. 67(1), pages 21-44, January.
    40. Avner Greif, 2006. "History Lessons: The Birth of Impersonal Exchange: The Community Responsibility System and Impartial Justice," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 221-236, Spring.
    41. Epstein, S. R., 1998. "Craft Guilds, Apprenticeship, and Technological Change in Preindustrial Europe," The Journal of Economic History, Cambridge University Press, vol. 58(3), pages 684-713, September.
    42. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721, November.
    43. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    44. Tanjim Hossain & Dylan Minor & John Morgan, 2011. "Competing Matchmakers: An Experimental Analysis," Management Science, INFORMS, vol. 57(11), pages 1913-1925, November.
    45. Alfred E. Lieber, 1968. "Eastern Business Practices and Medieval European Commerce," Economic History Review, Economic History Society, vol. 21(2), pages 230-243, August.
    46. Roth, Alvin E & Xing, Xiaolin, 1994. "Jumping the Gun: Imperfections and Institutions Related to the Timing of Market Transactions," American Economic Review, American Economic Association, vol. 84(4), pages 992-1044, September.
    47. Paul Milgrom, 2019. "Auction Market Design: Recent Innovations," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 383-405, August.
    48. Maarten Bosker & Eltjo Buringh & Jan Luiten van Zanden, 2013. "From Baghdad to London: Unraveling Urban Development in Europe, the Middle East, and North Africa, 800–1800," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1418-1437, October.
    49. van Bochove, Christiaan & Boerner, Lars & Quint, Daniel, 2012. "Anglo-Dutch premium auctions in eighteenth-century Amsterdam," Discussion Papers 2012/3, Free University Berlin, School of Business & Economics.
    50. Oscar Gelderblom, 2013. "Cities of Commerce: The Institutional Foundations of International Trade in the Low Countries, 1250-1650," Economics Books, Princeton University Press, edition 1, number 10139.
    51. Biglaiser, Gary & Friedman, James W., 1994. "Middlemen as guarantors of quality," International Journal of Industrial Organization, Elsevier, vol. 12(4), pages 509-531, December.
    52. Lopez,Robert S., 1976. "The Commercial Revolution of the Middle Ages, 950–1350," Cambridge Books, Cambridge University Press, number 9780521290463, November.
    53. Greif, Avner & Milgrom, Paul & Weingast, Barry R, 1994. "Coordination, Commitment, and Enforcement: The Case of the Merchant Guild," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 745-776, August.
    54. Stasavage, David, 2014. "Was Weber Right? The Role of Urban Autonomy in Europe's Rise," American Political Science Review, Cambridge University Press, vol. 108(2), pages 337-354, May.
    55. Lars Börner & John William Hatfield, 2017. "The Design of Debt-Clearing Markets: Clearinghouse Mechanisms in Preindustrial Europe," Journal of Political Economy, University of Chicago Press, vol. 125(6), pages 1991-2037.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Designing matching mechanisms in medieval times
      by Economic Logician in Economic Logic on 2011-03-09 23:09:00

    Citations

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


    Cited by:

    1. Madsen, Jakob B. & Robertson, Peter E. & Ye, Longfeng, 2024. "Lives versus livelihoods in the middle ages: The impact of the plague on trade over 400 years," European Economic Review, Elsevier, vol. 162(C).
    2. Davide Cantoni & Noam Yuchtman, 2014. "Medieval Universities, Legal Institutions, and the Commercial Revolution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 823-887.
    3. Greif, Avner & Tabellini, Guido, 2017. "The clan and the corporation: Sustaining cooperation in China and Europe," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 1-35.
    4. Avner Greif & Guido Tabellini, 2012. "The Clan and the City: Sustaining Cooperation in China and Europe," Working Papers 445, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    5. van Bochove, Christiaan & Boerner, Lars & Quint, Daniel, 2012. "Anglo-Dutch premium auctions in eighteenth-century Amsterdam," Discussion Papers 2012/3, Free University Berlin, School of Business & Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Boerner, Lars, 2016. "Medieval market making brokerage regulations in Central Western Europe, ca. 1250-1700," Economic History Working Papers 66834, London School of Economics and Political Science, Department of Economic History.
    2. Ogilvie, Sheilagh & Carus, A.W., 2014. "Institutions and Economic Growth in Historical Perspective," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 8, pages 403-513, Elsevier.
    3. Randall Wright & Yuet‐Yee Wong, 2014. "Buyers, Sellers, And Middlemen: Variations On Search‐Theoretic Themes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(2), pages 375-397, May.
    4. Yuet-Yee Wong & Randall Wright, 2011. "Buyers, sellers and middlemen: variations in search theory," Working Papers 691, Federal Reserve Bank of Minneapolis.
    5. Pieter Gautier & Bo Hu & Makoto Watanabe, 2023. "Marketmaking Middlemen," RAND Journal of Economics, RAND Corporation, vol. 54(1), pages 83-103, March.
    6. Mika Kallioinen, 2017. "Inter‐communal institutions in medieval trade," Economic History Review, Economic History Society, vol. 70(4), pages 1131-1152, November.
    7. Nunn, Nathan & Trefler, Daniel, 2014. "Domestic Institutions as a Source of Comparative Advantage," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 263-315, Elsevier.
    8. Diego Puga & Daniel Trefler, 2014. "International Trade and Institutional Change: Medieval Venice’s Response to Globalization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 753-821.
    9. Rubin, Jared, 2010. "Bills of exchange, interest bans, and impersonal exchange in Islam and Christianity," Explorations in Economic History, Elsevier, vol. 47(2), pages 213-227, April.
    10. Johnson, Noel D. & Koyama, Mark, 2017. "States and economic growth: Capacity and constraints," Explorations in Economic History, Elsevier, vol. 64(C), pages 1-20.
    11. David Dolejší, 2022. "Feudal bargain in Prague: The rise, spread, and fall of craft guilds," Rationality and Society, , vol. 34(2), pages 237-267, May.
    12. Fehr, Nils-Henrik M. von der & Harbord, David, 2018. "On the Enforcement of Trade Embargoes by the Merchant Guilds," MPRA Paper 88431, University Library of Munich, Germany.
    13. Gary Biglaiser & Fei Li & Charles Murry & Yiyi Zhou, 2020. "Intermediaries and product quality in used car markets," RAND Journal of Economics, RAND Corporation, vol. 51(3), pages 905-933, September.
    14. Avinash Dixit, 2003. "On Modes of Economic Governance," Econometrica, Econometric Society, vol. 71(2), pages 449-481, March.
    15. Xianwen Shi & Aloysius Siow, 2014. "Information externalities and intermediaries in frictional search markets," Canadian Journal of Economics, Canadian Economics Association, vol. 47(4), pages 1131-1152, November.
    16. Corentin Curchod, 2008. "Stratégies d’intermédiation et dynamiques de chaînes de valeur:leçons tirées de l’intermédiation électronique," Revue Finance Contrôle Stratégie, revues.org, vol. 11(2), pages 7-28, June.
    17. Greif, Avner & Tabellini, Guido, 2017. "The clan and the corporation: Sustaining cooperation in China and Europe," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 1-35.
    18. Jedwab, Remi & Johnson, Noel D. & Koyama, Mark, 2022. "Medieval cities through the lens of urban economics," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    19. Sheilagh Ogilvie, 2014. "The Economics of Guilds," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 169-192, Fall.
    20. Hagiu, Andrei, 2009. "Why Do Intermediaries Divert Search?," Department of Economics, Working Paper Series qt3f34c5dk, Department of Economics, Institute for Business and Economic Research, UC Berkeley.

    More about this item

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

    Statistics

    Access and download statistics

    Corrections

    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:wly:iecrev:v:64:y:2023:i:1:p:23-56. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.