It is appropriate, therefore, to interpret the enforcement of agreements within the same analytical framework as dispute settlement. Agreements are transactions in which participants exchange promises instead of ordinary goods. Promises are a peculiar commodity involving a high degree of asymmetry of information: the party who makes the promise knows much more about the likelihood of its being honored than the party who receives it. The actual outcome is the only available test of the quality of a promise. Broken promises can thus be seen as the "lemons" of their kind.

XREF: Connects information asymmetry in agreements to Akerlof's lemons model, the classic adverse-selection framework.

Diego Gambetta, The Sicilian Mafia The Busi…, loc. 60