Quality, Experience, and Monopoly: The Soviet Market for Weapons Under Stalin

30 Pages Posted: 8 May 2006

See all articles by Andrei Markevich

Andrei Markevich

New Economic School

Mark Harrison

University of Warwick; University of Birmingham

Abstract

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.

Suggested Citation

Markevich, Andrei and Harrison, Mark, Quality, Experience, and Monopoly: The Soviet Market for Weapons Under Stalin. Economic History Review, Vol. 59, No. 1, pp. 113-142, February 2006. Available at SSRN: https://ssrn.com/abstract=877417 or http://dx.doi.org/10.1111/j.1468-0289.2005.00334.x

Andrei Markevich (Contact Author)

New Economic School ( email )

100 Novaya Street
Skolkovo
Moscow, 143025
Russia
+79629851892 (Phone)
+74991293722 (Fax)

HOME PAGE: http://fir.nes.ru/en/people/professors/Pages/amarkevich.aspx

Mark Harrison

University of Warwick ( email )

Department of Economics
University of Warwick
Coventry, CV4 7AL
United Kingdom

HOME PAGE: http://warwick.ac.uk/markharrison

University of Birmingham ( email )

Birmingham, B15 2TT
United Kingdom

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