From Barter to Market: an Agent-Based Model of Prehistoric Market Development

Despite interest in preindustrial markets, archaeological discussions have largely been limited to proposing methods to determine the presence or absence of market exchange in ancient societies. While these contributions are important, methodological limitations have prevented theoretical considerations of the emergence and evolution of marketplaces and market exchange in prehistory. We propose that agent-based modeling provides a window to explore physical conditions and agent behaviors that facilitate the emergence of customary exchange locations and how such locations may evolve into socially embedded institutions. The model we designed suggests that simple bartering rules among agents can generate concentrated locations of exchange and that spatial heterogeneity of resources is the most important factor in facilitating the emergence of such locales. Furthermore, partner-search behaviors and exchange of information play a key role in the institutionalization of the marketplace. The results of our simulation suggest that marketplaces can develop, even with the absence of formalized currency or central planning, as a consequence of collective strategies taken up by agents to reduce exchange partner-search costs and make transactions more frequent and predictable. The model also suggests that, once established as a social institution, marketplaces may become highly conservative and resistant to change. As such, it is inferred that bottom-up and/or top-down interventions may have often been required to establish new marketplaces or relocate marketplaces to incorporate new resources, resolve supply-demand imbalances, or minimize rising economic costs that arise as a result of social, political, and economic change.