Political Fragmentation, Competition, and Investment Decisions: The Medieval Grinding Industry in Ponthieu, France, 1150–1250

24 Pages Posted: 7 Jul 2010

See all articles by Karine van der Beek

Karine van der Beek

Ben-Gurion University of the Negev - Department of Economics

Abstract

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.

Suggested Citation

van der Beek, Karine, Political Fragmentation, Competition, and Investment Decisions: The Medieval Grinding Industry in Ponthieu, France, 1150–1250. The Economic History Review, Vol. 63, No. 3, pp. 664-687, August 2010. Available at SSRN: https://ssrn.com/abstract=1635513 or http://dx.doi.org/10.1111/j.1468-0289.2009.00484.x

Karine Van der Beek (Contact Author)

Ben-Gurion University of the Negev - Department of Economics ( email )

1 Ben-Gurion Blvd
Beer-Sheba 84105, 84105
Israel

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