Increase the visibility of your scientific production by authorizing the export of your publications to HAL!

Two is Company, N is a Crowd? Merchant Guilds and Social Capital

Dessi, Roberta and Piccolo, Salvatore (2009) Two is Company, N is a Crowd? Merchant Guilds and Social Capital. TSE Working Paper, n. 09-059, Toulouse

Download (333kB) | Preview
Official URL:


We develop a theory of the emergence of merchant guilds as an efficient mechanism to foster
cooperation between merchants and rulers, building on the natural complementarity between
merchants’ market trading and mutual monitoring. Unlike existing models, we focus on local
merchant guilds, rather than alien guilds, accounting for the main observed features of their
behavior, internal organization and relationship with rulers. Our model delivers novel predictions
about guilds’ size, membership restrictions, and their welfare implications. Moreover, it identifies
the main channels through which the guilds’ social capital influenced their ability to cooperate
effectively with rulers. As we argue, the available historical evidence offers support for our theory.
We also extend the model to analyze the key trade-offs faced by rulers in choosing whether to
grant recognition to one or multiple guilds. This provides a rationale for the establishment of
both local and alien merchant guilds, helping us to understand the observed distribution of guilds
and their characteristics.

Item Type: Monograph (Working Paper)
Language: English
Date: July 2009
Place of Publication: Toulouse
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 18 Jan 2012 06:00
Last Modified: 02 Oct 2019 23:00
["eprint_fieldname_oai_identifier" not defined]:

Actions (login required)

View Item View Item


Downloads per month over past year