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The argument is the same one we made about the best practices software norm in Chapter 7.In this particular case, it is worth noting that many markets do fairly closely approximate contractual norm completeness.The fewer applicable value optimal norms there are, the more terms will remain in the contracts....
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Buyers will prefer to buy from the rest, the norm-compatible sellers.* As we did in the ideal market case, we divide the rest of the argument into a “buyer” part and a “seller” part.In this particular case, it is worth noting that many markets do fairly closely approximate contractual norm completeness....
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We will show that these informed buyers will buy from norm-compatible sellers.In the ideal market, each buyer conforms solely because of his or her own values, independently of the behavior of everyone else.Since we were assuming perfect information, it made sense to build that knowledge into the definition of perfect information....
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If we try this in real markets, we may end up with some terms that are neither compatible nor incompatible.In ideal markets, perfect information entailed that buyers knew which sellers offered compatible terms.If real markets approximate perfect competition and contractual norm completeness closely enough, the term-compatibility norm will emerge as a coordination norm....
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If United Airlines offers air travel on terms incompatible with relevant norms (excessive charges for baggage, for example), Southwest Airlines may call this to buyers’ attention in their advertisements.Real Markets: How the Coordination Norm Arises Real markets only approximate our ideal conditions.In both cases, in real markets the need for unified buyer demand in a mass market causes the norm that arises to be a coordination norm....