Many of the key characteristics of our model correspond to practices found at the Champagne Fairs. While merchants at the Fairs were not required to query prior to any contract, the institutions of the Fair provided this information in another manner. As noted above, the Fairs closely controlled entry and exit. A merchant could not enter the Fair without being in good standing with those who controlled entry, and any merchant caught cheating at the Fair would be incarcerated and brought to justice under the rules of the Fair. So anyone a merchant met at the Fair could be presumed to have a “good reputation” in precisely the sense of our model. It did not indicate that all free merchants had never cheated in the past; but it did indicate that anyone who had been convicted of cheating had made good on the judgment against him. Moreover, because merchants might disappear rather than pay their judgments, judges at the Fairs had to balance the size of their judgment so that the value of being able to attend future Fairs exceeded the award.

XREF: Connects to the repeated-dealing/reputation model of informal enforcement vs. formal legal institutions.

PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE O…, loc. 170