Social Networks 187
actions—sending goods to a partner if goods were obtained from him, sell-
ing the goods received if the partner also sells the goods sent to him, etc.—
potential free-riding could be avoided even without hierarchy and without a
powerful legal system. Nevertheless, trust had to be built up over a long time.
A step-by-step approach had to be taken by the merchants in the early stages
of mutual relationship or in case of trading with occasional partners. In game
theory this phenomenon is generally described as Tit-for-Tat strategy.62 The
growing volume of the transactions between Hildebrand Veckinchusen and
Gerwin Marschede is an example of how a bond of trust formed over time, sim-
ilar to many other Hanseatic commercial networks.63 Very often, partners also
tried to tighten personal relationships by mutual gift giving.64
Simultaneously with both culture and trust, reputation played a fundamen-
tal role in enforcing fair conduct between network members. This can easily
be shown by using a game-theoretical approach. Following Avner Greif ’s idea,
a trade relationship is modeled as a one-sided sequential prisoner’s dilemma.65
Within this framework, the form of reciprocal trade, which was predominant
among Hanseatic merchants, does not create incentive for the participants
to act fair. In a simple one-shot situation, for the partner who was selling the
other’s goods, gaining a P by cheating would have been bigger than a zero
return from fair behavior (see Figure 5.4a). In a more realistic scenario, where
62 Robert Axelrod, The Evolution of Cooperation (New York, 1984); Håkan Håkansson and
D. Deo Sharma, “Strategic Alliances in a Network Perspective,” in Iacobucci, ed., Networks
in Marketing (see footnote 38), 108–124, 116f.
63 Stark, Untersuchungen zum Profit (see footnote 47).
64 See for examples from Riga, Königsberg, Oslo and Rostock Wilhelm Stein, “Handels briefe
aus Riga und Königsberg von 1458 und 1461,” Hansische Geschichtsblätter 9.2 (1898), 59–125,
89–91, Nr. 10, 93–97, Nr. 13, and 114, Nr. 21; Stark, “Platz- und Kommissions händlergewinne”
(see footnote 42), 141; Thierfelder, Rostock-Osloer Handelsbeziehungen (see footnote 43), 209.
65 Avner Greif, “The Fundamental Problem of Exchange: A Research Agenda in Historical
Institutional Analysis,” European Review of Economic History 4 (2000), 251–284, 254–256.
Here, each of the two partners involved in mutual exchange would be at the same time
a “principal”, who is sending goods to the partner, as well as an “agent,” who is receiving
goods and selling them for the sender. While playing these roles merchants are assumed
to have a choice: as “principal” they can decide upon sending their goods; as “agent” they
can decide whether to cooperate or not. See on this model in more detail Ewert and Selzer,
“Wirtschaftliche Stärke durch Vernetzung” (see footnote 39), 50–60. On game-theoretical
approaches to the history of medieval trade see also Avner Greif, Institutions and the Path
to the Modern Economy: Lessons from Medieval Trade (Cambridge: Cambridge University
Press, 2004).