¹ See, for example, Wallace, W. Stewart, Documents Relating to the Northwest Company (Toronto, 1934);Google ScholarInnis, H. A., The Fur Trade in Canada (Toronto, 1970);Google ScholarMorton, Arthur S., A History of the Canadian West to 1870–1871 (London, 1939);Google ScholarRich, E. E., History of the Hudson's Bay Company, 1670–1870, 2 vols. (London, 1959).Google Scholar

² The few analytical works include the work of Carlos, Ann, The North American Fur Trade,1804–1821: A Study in the Life Cycle of a Duopoly (New York, 1986);Google Scholar“The Causes and Origins of the Canadian Fur Trade Rivalry, 1804–1821,” this JOURNAL, 41 (12. 1981), pp. 777–94;Google Scholar and “The Birth and Death of Predatory Competition in the North American Fur Trade: 1810–1821,” Explorations in Economic History, 19 (07 1982), pp. 156–83.CrossRefGoogle ScholarAnother recent paper by Enders, Alice T. and Macleod, W. Bentley, “Competition and Collusion in the North-American Fur Trade: 1804–1821” (unpublished manuscript, Queens University, 1984) also looks at the fur trade from a bargaining perspective. However, their analysis differs from ours in two important respects. First, they do not use the primary source material. Second, they do not consider models of bargaining under incomplete information.Google Scholar

³ Myerson, Roger B., “Two-person Bargaining Problems with Incomplete Information,” Econometrica, 52 (03 1984), pp. 461–87;CrossRefGoogle Scholar and “Cooperative Games with Incomplete Information,” International Journal of Game Theory, 13(1984), pp. 69–96;Google ScholarCrawford, Vincent P., “A Theory of Disagreement in Bargaining,” Econometrica, 50 (05 1982), pp. 607–38.CrossRefGoogle Scholar

⁴ The Northwest Company trade in the interior was divided into districts known as departments Over each department there was a Wintering partner.Google Scholar

⁵ Lamb, W. K., ed., Journals and Letters of Sir Alexander MacKenzie. (Toronto, 1970).Google Scholar

⁶ Ibid., pp. 416–17.

⁷ Minutes of Transactions Between Hudson's Bay Company and the Northwest Company 1804–06, Public Archives of Canada [henceforth PAC] Hudson's Bay Company MG20AI reel 18, para. 6.Google Scholar

⁸ The Northwest Company had been formed by the merger of Alexander Mackenzie's company and the old Northwest Company. The rivalry leading up to this merger was particularly intense and bitter. The Hudson's Bay Company letters at this time speak of “Canadian traders who respect neither justice nor equity but commit open acts of violence….” Hudson's Bay Company Records, Minute Books, MG20AI/219 (PAC, p. 6).Google Scholar

⁹ Minutes of Transactions, letter of May 1805.Google Scholar

¹⁰ Ibid., Letter of 19 February 1806.

¹¹ Ibid., letter of 31 January 1806.

¹² Ibid., letter of 19 February 1806.

¹³ Ibid., letter of 22 February 1806.

¹⁴ This period is discussed at length in Carlos, “Causes and Origins.”Google Scholar

¹⁵ Hudson's Bay Company Records, London Correspondence Outward—Official—Albany 1800, PAC MG20A6.Google Scholar

¹⁶ Course, Elliot, ed., New Light on the Early History of the Greater Northwest: The Manuscript Journals of Alexander Henry and of David Thompson (New York, 1897).Google Scholar

¹⁷ Lord Selkirk conceived the idea of a colony at Red River from the description of the area provided by Sir Alexander Mackenzie in his book.Google Scholar

¹⁸ A full discussion of the effect of this fall in demand can be found in Carlos, “Causes and Origins.”Google Scholar

¹⁹ Coues, New Light, Alexander Henry noted in 1808 that the Blackfeet“brought in wolves, but I sent them to my neighbours [Hudson's Bay Company] as wolves were not in season,” i.e., not in demand, p. 558.Google Scholar

²⁰ In a zero-sum game there are no benefits from cooperation. Anything one firm wins is at the expense of the other firm.Google Scholar

²¹ Papers Relating to the Red River Settlement, Selkirk Papers, PAC MG19, pp. 1–3000, letter of 3 June 1811.Google Scholar

²² Ibid.

²³ Ibid.

²⁴ Ibid., letter of 26 June 1811.

²⁵ Ibid.

²⁶ Ibid., letter of 24 July 1811.

²⁷ Ibid., letter of 6 August 1811.

²⁸ Ibid.

²⁹ See Carlos, “Birth and Death,” for a discussion of the animal stock depletion.Google Scholar

³⁰ Ray, Arthur, Indians in the Fur Trade (Toronto, 1974), p. 121. The muskrat was affected by changes in the level of precipitation. Any significant increases or decreases in the water levels in rivers decimated the population.Google Scholar

³¹ London Correspondence Outward, para. 38, 1814.Google Scholar

³² Wallace, Documents, p. 273.Google Scholar

³³ Selkirk Papers, August 1815 instructions to Lord Selkirk, p. 1631 n.Google Scholar

³⁴ Ibid.

³⁵ Ibid.

³⁶ In spite of the fact that the Hudson's Bay Company was negotiating with the Northwest Company to leave Athabasca under Northwest Company control, the Hudson's Bay Company had already sent an outfit to Athabasca.Google Scholar

³⁷ Selkirk Papers, August 1815 instructions to Lord Selkirk.Google Scholar

³⁸ Ibid., negotiations of 10 December 1815, p. 217n. The actual details of the Northwest Company counterproposal were put forward on 12 December.

³⁹ Ibid., negotiations of 12 December.

⁴⁰ Ibid.

⁴¹ Ibid.

⁴² Ibid.

⁴³ Ibid., negotiations of 23 December (p. 244).

⁴⁴ At this point the threats and counterthreats became directly physical. The use of such tactics as bully boys, trading each others' debts, and the kidnapping business is discussed at length in Carlos, “Birth and Death.”Google Scholar

⁴⁵ London Correspondence Outward, 1817.Google Scholar

⁴⁶ Rich, E. E., ed., Journal of Occurrence in the Athabasca Department by George Simpson, 1820 and 1821 Report (Toronto, 1938) states that the Hudson's Bay Company trading loss had been 12,000 pounds sterling over a long period (p. 394).Google Scholar

⁴⁷ The Northwest Company position was severely weakened by the capture of Fort William in 1817 by Lord Selkirk. The Company lost two years' trade, furs in 1817 and trade goods in 1818.Google Scholar

⁴⁸ Rich, Journal, p. 356.Google Scholar

⁴⁹ Ibid., p. 361.

⁵⁰ Selkirk Papers, p. 6960.Google Scholar

⁵¹ Agreement for carrying on the fur trade by the Hudson's Bay Company exclusively under the terms within mentioned and Deed Poll, 26 March 1821. See Wallace, Documents, p. 321.Google Scholar

⁵² The actual personnel on the Hudson's Bay Company committee had also changed. By 1810 the composition of the committee was quite different from what it had been in 1804.Google Scholar

⁵³ There is already some other work in economic history which uses bargaining theory. We have already mentioned Enders and Macleod, “Competition and Collusion.” There is also the work of Liebcap, Gary D. and Wiggins, Steven N., “The Influence of Private Contractual Failure on Regulation: The Case of Oil Field Unitization,” Journal of Political Economy, 93 (08 1985), pp. 690–714;CrossRefGoogle ScholarJohnson, Ronald N. and Libecap, Gary D., “Contracting Problems and Regulation: The Case of the Fishery,” American Economic Review, 72 (12 1982), pp. 1005–22;Google Scholar and Wiggins, Steven N. and Libecap, Gary D., “Oil Field Unitization: Contractual Failure in the Presence of Imperfect Information,” American Economic Review, 75 (06 1985) pp. 368–85.Google Scholar