While marvelling at the Pantheon in Rome, one wonders both how such a magnificent dome (still) stands and how much the Romans knew as to why it would stand. The impressive development of the Roman empire and its economy raises exactly the same two questions. Managing Information in the Roman Economy addresses them by focusing on a foundational issue: information. In fourteen insightful chapters, the authors examine information problems from various perspectives in several economic activities and discuss solutions implemented to reduce their impact on economic life.

As is made clear at various junctures from the incipit in chs. 1 (García Morcillo and Rosillo-López) and 2 (Revilla) to the explicit in ch. 14 (Andreau), information problems — say, between a buyer and a seller — pertain to either or both of two categories: lack of information and asymmetry of information. Lack of information — say, neither the buyer nor the seller knows the exact quality of the asset traded — generates uncertainty. Reducing such uncertainty benefits both parties to a trade and facilitates the efficient allocation of resources in the economy. Uncertainty also amounts to transaction costs — think of the cost of insurance — hence reducing uncertainty may increase trade volume. The book documents the existence and functioning of various practices (Flohr, ch. 10; Tran, ch. 11), rules and institutions — such as the aerarium Populi Romani (Díaz Fernández and Pina Polo, ch. 3) and the bibliothêkê enktêseôn (Lerouxel, ch. 7) — whose largely deliberate effect was to increase the total amount of information available to economic actors (Roselaar, ch. 5; Verboven, ch. 13).

The book also documents how asymmetric information generated two sets of problems. Imagine that sellers are better informed than buyers about the quality of a good. If buyers do not anticipate the problem, they may buy for a price that is, in fact, too high, resulting in an unfair distribution of the trade surplus. But if buyers anticipate the problem, its consequences are arguably even worse because, as explained in the book from a rich array of perspectives, buyers may refuse to buy goods that have a high price, which in turn induces sellers to withdraw goods of high quality from the market. Eventually, this leads to a ‘market for lemons’ where only low-quality goods are traded for low prices, and all other goods remain unsold despite demand (as in G. Akerlof, Quarterly Journal of Economics 84 (1970), 488–500). A common solution to such asymmetric-information problems comes from institutions that provide information to the uninformed party and from legal or contractual commitment devices that make the seller's assertions about the quality of the good credible for the buyer (Holleran, ch. 8). Liability for failure to disclose defects, for instance, is one such rule and allows the transfer of information from the informed to the uninformed party (Lavan, ch. 9).

There is, however, another diametrically opposite strategy to mitigate the problem of asymmetric information: preventing one party from becoming more informed than the other, in fact reducing the total amount of information available. This method reduces asymmetric information at the price of increasing uncertainty and may be useful when other alternatives are unavailable. In modern times, the practice of Block Booking required that distributors buy all of the movies produced by a producer in a given year en bloc, thereby preventing buyers from using their superior expertise about a film's box-office prospects and cherry-picking the good ones (R. W. Kenney and B. Klein, Journal of Law and Economics 26 (1983), 497–540). A question that this book raises is whether Roman traders had already figured out that ‘removing’ information may sometimes be more effective than providing it. A setting in which this may have been the case was the slave and cattle markets supervised by the aediles, where speed and standardisation effectively prevented buyers from carefully examining the goods — including, alas, people — for sale. This, in turn, may have allowed sellers — who often were intermediaries — to make expeditious assessments of quality and to price items based on some easily verifiable characteristics only (García Morcillo, ch. 4).

As well as illustrating how institutions, laws and private contracts tackled the problems of uncertainty and asymmetry of information (like the first question our Pantheon admirer faces), this book does a possibly even better job of demonstrating that Roman traders, scholars and lawmakers understood these problems very well and consciously tried to find solutions (e.g. Nappo, ch. 12), addressing the second question we posed at the outset. In a particularly fitting instance, Cicero discussed two cases of asymmetric information in contracts and asked the question of whether the informed party was to be held liable for failure to disclose (Rosillo-López, ch. 6). These cases are strikingly similar to two of the most famous cases of asymmetric information in American contract law, and Cicero's reasoning is particularly close to that of his modern counterpart: Antony Kronmann (Journal of Legal Studies 7 (1978), 1–34), writing twenty centuries later. One case (Cic., Off. 3.52; cf. Laidlaw v. Organ, 15 U.S. (2 Wheat.) 178 (1817)) concerned a contract between two parties, one of which had superior business intelligence about an event (arrival of ships in times of famine; cf. end of the war) and, hence, the value of the trade. Notably, the story seems to suggest that the parties had ex ante similar abilities to acquire information. In another case (Cic., Off. 3.54; cf. Obde v. Schlemeyer, 56 Wash. 2d 449, 353 P.2d 672(1960)), the seller of a house is better informed than the buyer about latent defects; here, the seller clearly has ex ante cheaper access to information. Law and economics scholars may well have to update — or rather ‘back-date’ — their citations list after reading this book.

A further merit of the book is the important questions it leaves one with. The examples and case studies in this book are static. What if one were to extend the analysis comparatively, both synchronically and diachronically? That is, how could the insights provided by this book illuminate research into the differences between various institutions, legal rules and contractual practices that coexisted in the Roman world and/or rationalise the evolution of such institutions, legal rules and contractual practices through time? This book shows that the workings of uncertainty and asymmetric information shaped the legal and economic environment. It is a short step to claim that as conditions and attendant problems evolved, so too institutions, rules and contracts would have changed in predictable ways. Such questions have been asked in specific case studies (e.g. B. Abatino and G. Dari-Mattiacci in G. Dari-Mattiacci and D. P. Kehoe (eds), Roman Law and Economics. Volume II (2020), 401–25), but a systematic investigation, as broad as this book's ambitions are, is still missing.