Networks, Institutions, and Uncertainty: Information Exchange in Early-Modern Markets

Abstract

We analyze patterns of informal information exchange to assess the role of relational and institutional governance systems and uncertainty in encouraging information exchange, and therefore information flow. Using archival data from an emerging global trade network that developed over the seventeenth, eighteenth, and nineteenth centuries, we show that uncertainty drove information exchange. Relational governance mechanisms such as small group exchange were largely absent, and increasing institutional strength was associated with decreasing rates of information exchange. The results suggest that opportunity and demand were more important determinants of information exchange than the emergence of formal and relational governance systems.