Adaptation to Uncertainty and Small Numbers Exchange: The New England Fresh Fish Market

Abstract

Relatively inaccurate and slow dissemination of market information and location and ownership factors cause trading to take place under conditions of uncertainty and small numbers. The inefficiencies and inequities which might otherwise result in each individual transaction are mitigated by a pattern of very personal, long-term, bilateral agreements. These agreements deal with the efficiency and equity problems through a system of reciprocation over time. Nevertheless, the collective effect of the agreements, under certain common conditions, is to suppress further the flow of market information and seriously to impair product quality incentives and other measures of market performance.