PROMISE KEEPING IN THE GREAT SOCIETY: A MODEL OF CREDIT INFORMATION SHARING

Reputation is possible in a small community, but in the Smith‐Lippmann‐Hayekian Great Society people are mainly strangers. I model credit reporting as a system of formalized and surgically‐precise gossip. In the Great Society credit reporting makes possible reputations, which make possible credit relationships. But forming a credit reporting system is no simple matter. Historically it has been local gossip in the small community that has made possible credit reporting “gossip” in the Great Society.