There are three theories on how prices are set, he says. Is the bribe purely the product of cultural norms, influenced by customs specific to the region? Is the bribe simply an individual transaction, not affected by culture? Or is the bribe economy embedded within a bigger market? “Just as if there was a firm running a toll booth,” Olken says, “the firm would balance off how much revenue they are getting from the tolls, versus the fact that if they were charging more for the tolls there would be fewer cars driving through; they’ll be making an optimal trade-off. So, in fact, that bribe is the equilibrium of a firm’s price-setting decision.”
(Michael Moynihan: Graft Paper. The American.)
Successful rulers within this belt of semi-desert lands [the Silk Road] were either steppe nomads themselves or but recently descended from such folk. [...] For a long time the resulting symbiosis [with caravan merchants] was delicate and liable to frequent upset. By taking too much from caravan personnel, merchant's incentive to undertake the risks of travel could be snuffed out. Yet by not paying enough to support a superior military establishment along the trade route, merchants invited more distant nomad groups to push southward from the open steppe and try to seize as booty what they were not yet in a position to tax as rulers.
(William H. McNeill: Plagues and Peoples)
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