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Incentives in Merchant Empires: Portuguese and Dutch Compensation Schemes

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  • Claudia Rei

    (Department of Economics, Vanderbilt University)

Abstract

The Portuguese and Dutch merchant empires had a similar geographic distribution with outposts all around the Indian Ocean, which they controlled and manned. Both empires faced the same problem of monitoring their agents in remote corners of the world. Each, however, arrived at a different solution to the monitoring problem. I use a principal-agent model to link different monitoring options to the different organizational structures of the two empires. I further investigate the implications of the model with archival data on labor compensation for Portuguese and Dutch workers overseas.

Suggested Citation

  • Claudia Rei, 2011. "Incentives in Merchant Empires: Portuguese and Dutch Compensation Schemes," Vanderbilt University Department of Economics Working Papers 1112, Vanderbilt University Department of Economics.
    • Handle: RePEc:van:wpaper:1112
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    References listed on IDEAS

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    Cited by:

    1. Claudia Rei, 2011. "Turning Points in Leadership: Shipping Technology in the Portuguese and Dutch Merchant Empires," Vanderbilt University Department of Economics Working Papers 1123, Vanderbilt University Department of Economics.
    2. Arteaga, Fernando & Desierto, Desiree & Koyama, Mark, 2024. "Shipwrecked by rents," Journal of Development Economics, Elsevier, vol. 168(C).

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    More about this item

    Keywords

    merchant empires; labor compensation; monitoring;
    All these keywords.

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913

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