PEOPLE will exchange only if they perceive what they get to be more valuable than what they give. To form such perceptions, the attributes of the traded items have to be measured. Some measurements are easy to obtain; others pose difficulties. For example, determining the weight of an orange may be a low-cost, accurate operation. Yet what is weighed is seldom what is truly valued. The skin of the orange hides its pulp, making a direct measurement of the desired attributes costly. Thus the taste and the amount of juice it contains are always a bit surprising. The grower, more knowledgeable than the consumer, may gain by making the surprise an unpleasant one. The potential errors in weighing the commodity and in assessing its attributes permit manipulations and therefore require safeguards. The costs incurred by the transactors will exceed those under joint maximization. A sampling of activities that arise solely because these costs are positive may hint at how costly the measurement of commodity attributes is.1 Had product information been costless, warranties would disappear since attribute levels and defects could be effortlessly identified at the time of exchange; fancy packaging (unless valued for its own sake) as well as the Consumer Report and the Good Housekeeping Seal would be super-