Due to the high transaction cost that would be necessary for large numbers of people to negotiate with each other, even those who are sanguine about private markets become reserved when externalities affect large populations. The distinction between private and societal interest is well...

A bilateral danger of underperformance exists when two parties sink investments with payoffs dependent on the behavior of the other. There are five general categories of defense against that danger: (1) Legal action against a misbehaving co-investor; (2) Reliance on a reputation for...