We began our analysis by studying an environment in which private information about behavior in exchanges is a potential impediment to trade. Under complete information, even if meetings among particular pairs of traders are infrequent, informal norms of behavior are theoretically sufficient to police deviations. But when information is costly, the equilibrium may potentially break down and informal means may not be sufficient to police deviations.

DEFINE: Clarifies the distinction between complete information and costly information in sustaining informal norms as a trade-policing mechanism. Builds on: "Reputation enforcement requires low costs relative to trade profitability."

PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE O…, loc. 163