Even if the Law Merchant and related systems were effective underpinnings for local trade, how was information about a trader's dishonesty in one location transmitted to another? The model in this paper is too simple to handle this problem, but we hope to extend our approach to the institutions that developed during the middle ages to protect against the added problems raised by spatial separation. This includes the merchant gilds in northern Europe, the consulates of the Italian city states, and the organization of alien merchants into colonies (like the Steelyard in medieval London) with local privileges and duties. These institutions can also be understood from the perspective developed in this paper - they are designed to reinforce reputation mechanisms that alone are insufficient to support trade.

XREF: Connects to institutional economics and the notion that organizations arise to support trust where simple reputation fails. Builds on: "Entry control at fairs enforced merchant reputations"

PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE O…, loc. 172