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Exchange is the basis of economic growth and development. If market works fully on the assumptions of classical economist market is self-sufficient in producing and allocating resources efficiently. Unfortunately, in the real world the assumptions of perfect rationality, perfect information and zero transaction cost are not realistic. In the absence of such features in an economic agent market bound to fail. In such situations of market failure we need formal institutions to devise constraints that structure behavior of an economic agent for political, economic and social interaction[1]. |
