Client dependence on a single protection firm creates fragility

Evidence

The first two factors affect the long-term durability of mafia protection: if protection depends heavily on a single individual, it is inevitable that a random accident may suddenly deprive his clients of its benefits. At the same time, if internal competition is such that it creates a high rate of bankruptcy, the accident, fatal at times, may not be that random. In both cases, from the client’s point of view reconstructing a protection contract with another firm may be arduous and time-consuming, leaving one temporarily at the mercy of predators (for more on these points, see Chapters 3 and 7). — Diego Gambetta, The Sicilian Mafia The Business of…, 65

Categorization

• XREF: Analogous to the reader’s private-judge literature: protection services face the same holdup/fragility concerns as Milgrom’s reputation institutions, which built redundancy through multiple fairs and judges.