A spatial duopoly: competition in the western Canadian fur trade, 1770–1835

Abstract

The period 1770–1835 witnessed the growth and climax of intense fur trade rivalry in western Canada between the Hudson's Bay Company and the North West Company together with independent “peddlers”. This competition had significant spatial consequences, most notably the proliferation of posts on interior waterways, leap-frogging of competitors to more advantageous locations, leading to close clustering of rival posts. This clustering occurred in spite of a bitter and sometimes violent tug-of-war over Indian fur supplies. This locational pattern is examined in the light of Harold Hotelling's concept of duopolistic competition. A spatial duopoly model is described and applied to the fur trade and indicates that the clustering of rival posts was a predictable outgrowth of duopolistic economic forces, rather than an anomalous result of perverse non-economic behaviour. These conclusions are affirmed by observers of the trade at the time of competition and by evidence of spatial change in the locational pattern following the merger of the two rivals in 1821.