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What do Notaries do?. Overcoming Asymmetric Information in Financial Markets: The Case of Paris, 1751

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  • Philip T. Hoffman
  • Gilles Postel-Vinay
  • Jean-Laurent Rosenthal

Abstract

Using evidence from 18th century Paris, we explore how financial intermediaries resolved problems of asymmetric information in financial markets. The Parisian intermediaries were notaries, and after examining their role in asset markets, we develop a more general model of intermediaries' behavior and then test the model using a rich set of data from Paris. Institutions for disseminating information insured that intermediaries provided high quality service, and such institutions were central to the growth of asset markets in pre-industrial Europe.

Suggested Citation

  • Philip T. Hoffman & Gilles Postel-Vinay & Jean-Laurent Rosenthal, 1998. "What do Notaries do?. Overcoming Asymmetric Information in Financial Markets: The Case of Paris, 1751," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 154(3), pages 499-499, September.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(199809)154:3_499:wdnd_2.0.tx_2-h
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    References listed on IDEAS

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    1. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, pages 87-100.
    2. Greif, Avner, 1989. "Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 857-882, December.
    3. Joseph Farrell and Nancy T. Gallini., 1986. "Second-Sourcing as a Commitment: Monopoly Incentives to Attract Competition," Economics Working Papers 8618, University of California at Berkeley.
    4. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, pages 393-410.
    5. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, pages 87-100.
    6. Abreu, Dilip & Pearce, David & Stacchetti, Ennio, 1986. "Optimal cartel equilibria with imperfect monitoring," Journal of Economic Theory, Elsevier, pages 251-269.
    7. Bardhan, Pranab, 1987. "Alternative Approaches to the Theory of Institutions in Economic Development," Department of Economics, Working Paper Series qt4t97z6v6, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    8. Joseph Farrell & Nancy T. Gallini, 1988. "Second-Sourcing as a Commitment: Monopoly Incentives to Attract Competition," The Quarterly Journal of Economics, Oxford University Press, pages 673-694.
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    Citations

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    Cited by:

    1. Alberto Bennardo & Marco Pagano & Salvatore Piccolo, 2015. "Multiple Bank Lending, Creditor Rights, and Information Sharing," Review of Finance, European Finance Association, pages 519-570.
    2. Benito Arruñada, 2007. "Market and institutional determinants in the regulation of conveyancers," European Journal of Law and Economics, Springer, pages 93-116.
    3. Benito Arruñada, 2007. "Market and institutional determinants in the regulation of conveyancers," Economics Working Papers 1034, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Alberto Bennardo & Marco Pagano & Salvatore Piccolo, 2015. "Multiple Bank Lending, Creditor Rights, and Information Sharing," Review of Finance, European Finance Association, pages 519-570.
    5. Kaire Põder, 2010. "Credible commitment and cartel: the case of the Hansa merchant in the guild of late medieval Tallin," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, pages 43-60.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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