This paper is a contribution to economic geography that leans on cooperative game theory. In particular, we envision towns (that are protected by walls) versus countryside where such protection is missing. An extension also provides a basic theory of when trading routes will be protected.

Summary This paper is a contribution to economic geography that leans on cooperative game theory. In particular, we envision towns (that are protected by walls) versus countryside where such protection is missing. An extension also provides a basic theory of when trading routes will be protected.