Homogenous Social Groups Facilitate Exchange

The efficiency of exchange in an economy depends on the structure of social institutions in which trade is allowed to take place. This calls for an emphasis on the economic analysis of social institutions. The purpose of this paper is to introduce the concept of homogeneity of social groups. Homogenous social groups are described both theoretically and by way of examples. They are shown to facilitate the establishment and preservation of certain types of exchange relationships, both legal and illicit. This sheds some new light on received options of publicy, e. g. in terms of some unorthodox ant-trust implications