Cachet rules chiefly restrain brokers from skimming price differentials.

Evidence

Although the cachet is formally an agreement between a buyer and a seller, its most important function in the market is to regulate the relationship between a seller and his broker. If no cachet were used and the buyer offered five hundred dollars per karat for the stone, the broker might tell the seller that the buyer offered four hundred dollars per karat. If the seller accepted, the broker would pocket the difference. This is not the type of dishonest behavior that could be easily monitored and enforced through reputation bonds since detection and a determination of the precise circumstances would be difficult. — Lisa Bernestein, Opting out of the Legal System, 64

Categorization

• XREF: Directly parallels Coleman’s network-closure third-party monitoring: the cachet is a formal device that makes the broker’s opportunistic behavior visible, because the seal on the parcel commits the price in a way that prevents hidden renegotiation. Strong echo of how Sicilian secrecy enforces non-cooperation vs. how diamond markets use visibility to enforce honesty. — connects to: Brokers cut reputation-information costs because their investment is less transaction-specific.
• SEED: The broker-skimming problem is an angle for an essay on how market intermediaries introduce principal-agent theft that community reputation alone cannot police — the very failure mode Bellodi faces from intermediaries/translators in the Sicilian context.

Broader Connections

• Brokers cut reputation-information costs because their investment is less transaction-specific. #expands (0.85)