Impersonal trade through intermediaries without enforceable contracts: from ancient commerce to present-day illegal trafficking

We model long distance historical trade through intermediaries (couriers). Assuming contracts cannot be enforced and the courier can abscond, we characterize optimal trade schemes. The courier makes many but finite return trips, being entrusted with bundles of ever-increasing value, the last of which they keep for themselves. We are consistent with evidence including: (i) finite trade schemes through intermediaries in Mesopotamia; (ii) foreigner-intermediated trade between Egypt and Cyprus; and (iii) increasing cargos of slaves entrusted to captains over their careers. Applying our model to modern day trafficking of illegal goods yields important implications for interdiction.