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Explorations in Economic History, Vol.41 (2004)

Abstract: In this paper, the problem of contracting over space and time in the state-less environment of late medieval Germany is examined. It is argued that, as there were neither political organizations with territorial monopolies of force nor a law merchant which could have been used in order to enforce compliance, the threat of taking recourse to feuds helped the actors credibly to commit to contracts. The article analyzes which institutions restricted feuding and why these rules were generally respected, examines the calculus which led to the decision to declare a feud, and explains how this helped to realize gains from exchange.