Premium
Political fragmentation, competition, and investment decisions: the medieval grinding industry in Ponthieu, France, 1150–1250
Author(s) -
VAN DER BEEK KARINE
Publication year - 2010
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.1468-0289.2009.00484.x
Subject(s) - monopolistic competition , politics , economics , profit (economics) , profit maximization , competition (biology) , revenue , monopoly , fragmentation (computing) , market economy , economic rent , mill , microeconomics , political science , law , geography , finance , ecology , computer science , biology , operating system , archaeology
This article explores the effects of political structure on rulers' monopolistic gains and investment decisions in the context of the medieval milling industry in northern France, 1150–1250. Using Salop's spatial model, this article aims to show that political fragmentation increased investment in watermill construction because it reduced the capacity of rulers to limit competition from neighbouring mills. The calculations demonstrate that competition significantly reduced rulers' income from watermills and that the construction of more than 50 per cent of these mills cannot be economically ‘justified’ unless rulers' profit maximization over joint production is considered, and revenues from additional labour allocated to wheat production is included.