A basic problem for trade is uncertainty. If economic prospects are too uncertain, people will refrain from doing business. This is bad not just for them but for the entire economy, since it limits exchange and the gains from trade. Price volatility is one major source of uncertainty. Unexpected fluctuations in prices can wipe out a merchant's profits or even his entire business.

One strategy for reducing such uncertainty is to gather information about prices and the factors that might affect them. To obtain information, as we saw in Chapter 9, medieval and early modern merchants used a whole array of institutional mechanisms.