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Credible commitment and cartel: the case of the Hansa merchant in the guild of late medieval Tallin

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  • Kaire Põder

    (Tallinn University of Technology)

Abstract

This paper contributes to the ongoing debate of institutional research in economics and the methodological debate over the plausibility of using analytic narratives, in social sciences in particular. Using a single historical case we argue that in Tallinn by and large the merchant guild solved a commitment problem in the Hanseatic League and the organisation-institution of the guild was meant for efficient enforcement of inter-city trade. We show that this argument holds in the late medieval period by using an extensive form of punishment and sanctions game. We also argue that after the breakup of the Hanseatic League, guilds turned into protectionist and rent-seeking cartels.

Suggested Citation

  • Kaire Põder, 2010. "Credible commitment and cartel: the case of the Hansa merchant in the guild of late medieval Tallin," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 10(1), pages 43-60, June.
    • Handle: RePEc:bic:journl:v:10:y:2010:i:1:p:43-60
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    File URL: https://www.tandfonline.com/doi/epdf/10.1080/1406099X.2010.10840470
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    References listed on IDEAS

    as
    1. 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.
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    More about this item

    Keywords

    economic history; credible commitment; analytic narratives; reputation mechanism; Hanseatic League;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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