What the study found
The study found that competition between two metropolises over a colony's trade policy can produce different equilibrium outcomes, including peace with free trade or war with exclusive colonial trade. Which outcome appears depends on how each metropolis values trade with the other versus trade through the colony.
Why the authors say this matters
The authors conclude that the model captures central features of the mercantilist era, including overseas commerce, colonial conflicts, and restrictive trade policies. The findings indicate it also offers insights into the eventual decline of mercantilism.
What the researchers tested
The researchers developed a model of colonial wars and trade restrictions in which two metropolises compete for control over a colony's trade policy. They analyzed equilibrium outcomes based on the relative value each metropolis places on mutual trade and colonial trade.
What worked and what didn't
In one outcome, peace with free trade arises when both metropolises value trade with each other more than colonial trade. In another, war with exclusive colonial trade arises when both prefer colonial trade to trade with each other. A third outcome can involve war with either free or exclusive colonial trade, depending on whether the victor values trade with its rival above colonial trade.
What to keep in mind
The abstract provides a theoretical model summary rather than empirical evidence. It does not describe data, specific historical cases, or limitations beyond the model's scope.
Key points
- The model studies two metropolises competing for control over a colony's trade policy.
- Restricting a rival's access to colonial trade can improve the controlling metropolis's terms of trade.
- Those restrictions can also affect trade between the two metropolises themselves.
- The model yields three equilibrium outcomes: peace with free trade, war with exclusive colonial trade, or war with either free or exclusive colonial trade.
- The authors say the model reflects features of the mercantilist era and may help explain its decline.
Disclosure
- Research title:
- Model links colonial wars to exclusive trade control
- Authors:
- Ivan G. Lopez Cruz, Gustavo Torrens
- Institutions:
- Indiana University, Sabancı Üniversitesi
- Publication date:
- 2026-02-01
- DOI:
- 10.1111/caje.70044
- OpenAlex record:
- View
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