The Self-Regulation of Private Organised Markets

S.C. Pirrong

Washington University from Business, Law and Economics Center, John M. Olin School of Business, Washington University

Abstract: In a Walres-debreu world, all relevant attributes of all traded commodities are completely and costlessly specified, information is symmetric and costless, and all contracts ate costlessly enforced. In the real world in which trade takes place, it is costly to specify and verify commodity attributes, profound information asymmetries can exist, and parties have an incentive to renege opportunistically on their contractual commitments.

Keywords: INFORMATION; ECONOMIC MODELS; CONTRACTS; COMMODITIES (search for similar items in EconPapers)
JEL-codes: L50 L51 O13 (search for similar items in EconPapers)
Pages: 19 pages
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:fth:wablec:97-05

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