Property rights, competition, and depletion in the eighteenth-century Canadian fur trade: the role of the European market

Pricing behaviour at three Hudson's Bay Company trading posts is examined i n terms of a model of long-run profit maximization of a depletable resource . At Fort Churchill, where the company acted as a monopsonist purchaser of furs from the Indians, rising European fur prices had little impact on pric es paid to Indians, and beaver stocks in the hinterland were maintained. At Fort Albany and York Factory, where the company faced competition from Fre nch traders, prices at the posts were raised, and the beaver was depleted. These outcomes are consistent with optimal pricing behaviour by the company . The lack of well-defined Native property rights to the beaver was a cruci al element.