This paper shows how recent developments in the Economics of Information can provide insights into economic relations in less developed countries, and how they can provide explanations for institutions which, in neoclassical theory, appear anomalous and/or inefficient. Sharecropping and other...

This paper provides the foundations of a general theory of information and the capital market. We show that in a pure gambling market, even with asymmetric information, there cannot exist an equilibrium with trade with rational individuals. We argue that although a pure exchange stock market is...