Although trade practices and customs have remained largely unaffected by the shift from a homogeneous-group-based contractual regime toward one that is based increasingly on information technology, the change could radically affect the economic structure of the industry. In a homogeneous-group-based contractual regime, developing a reputation for trustworthiness and fair dealing takes time since reputation information is communicated solely by world of mouth and depends largely on personal contacts. This results in high barriers to entry.

XREF: Connects to the economics of reputation as a barrier to entry — parallels literature on group-based trust networks (e.g., ethnic trading networks) and how credentialing/technology lowers entry costs.

Lisa Bernestein, Opting out of the Legal Sys…, loc. 209