A mafioso guaranteed cartel quotas when few sellers made collusion enforceable.

Evidence

Until 1955 only twelve commissionari were operating, though more than twelve permits had been issued. The freedom of customers and producers was restricted. When scaristi were few, collusive agreements were feasible because they were easy to enforce, a factor that made Palermo one of the most expensive of cities for consumers (CPM-RMI: 8). A man of honor, himself a commissionario, acted as guarantor for anticompetitive arrangements and controlled the largest share of the transactions. Now, evidence suggests that it would no longer be profitable to pay someone, like “Don Peppe” of bygone days, to enforce collusive quotas, for there are simply too many commissionari. Someone somewhere would be bound to break the deal. — Diego Gambetta, The Sicilian Mafia The Business of…, 555

Categorization

• XREF: The man of honor as guarantor of collusive quotas is precisely Gambetta’s private enforcer, and the passage even specifies the condition under which his service loses value: too many sellers, mirroring Milgrom’s condition that institutions emerge or decay with the cost of information and monitoring.
• SEED: An article on when private protection becomes unprofitable — the natural business-cycle of mafia enforcement as a function of market concentration.
• ADDENDUM: Reinforces the On Sacrifice article’s theme that Mafia ‘protection’ is rooted in ties of personal obligation; also the cartel-guarantor role parallels the family-headed monopolies described there.