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- Title
Barter, centralized merchants and geographical spread.
- Authors
Noguera, José
- Abstract
This essay analyses the circumstances under which a redistributive barter system with centralized merchants dominates over primitive unstructured barter. It emphasizes the role of the geographical spread to explain the emergence of structured trade. The model analytically shows how, in the presence of taste for variety and increasing returns to scale in the production of commodities, the opportunity cost of direct bartering interacts with the transport costs and the geographical spread to explain the existence of intermediaries, and provides some interesting links between the literature on market emergence and the birth and growth of cities.
- Subjects
BARTER; BARTERING services; TRANSPORTATION rates; URBAN growth; OPPORTUNITY costs; RETURNS to scale
- Publication
Papers in Regional Science, 2011, Vol 90, Issue 1, p143
- ISSN
1056-8190
- Publication type
Article
- DOI
10.1111/j.1435-5957.2010.00311.x