Although keeping this type of information about dealer behavior from a market that works largely on reputation may slightly impair the efficient operation of the market for reputation information, in the context of the diamond industry's institutional structure, there are sound reasons for this practice. … Furthermore, it may be that the information most important to the reputation market is not that a dealer has been involved in a dispute or even that he has breached a contract, but rather that he has been prepared to either settle disputes or abide by the judgments of the arbitral tribunal when a third-party adjudication was necessary.

QUESTION: This challenges the assumption that full transparency supports reputational efficiency. Worth exploring whether opacity in adjudication outcomes can preserve more valuable reputational signals.

Lisa Bernestein, Opting out of the Legal Sys…, loc. 241