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Quality, experience, and monopoly: the Soviet market for weapons under Stalin 1
Author(s) -
MARKEVICH ANDREI,
HARRISON MARK
Publication year - 2006
Publication title -
the economic history review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.014
H-Index - 49
eISSN - 1468-0289
pISSN - 0013-0117
DOI - 10.1111/j.1468-0289.2005.00334.x
Subject(s) - monopoly , compromise , quality (philosophy) , christian ministry , business , commerce , market economy , economics , industrial organization , law , political science , philosophy , epistemology
SUMMARY Monopoly is a particular problem in markets where experience goods are traded, since the consumer cannot respond to bad experiences by switching repeat purchases to another supplier. New evidence shows how the defence ministry as buyer in the Soviet market for military goods responded to this problem by investing in an evaluation of quality prior to purchase, by showing reluctance to buy, and by exploiting the available non‐market means to influence the defence industry as supplier. The effectiveness of these stratagems was limited by the defence industry's counteractions and because the buyer had no choice but to come to a compromise with the supplier.