Contract terms depend on the relative bargaining power of customer and mafioso

Evidence

The nature of the protection contract is also conditional upon the relative strength of customer and mafioso. Other things being equal, legal businesses are less vulnerable to the mafioso’s monopoly, for they can always resort to the law. Similarly, the mafioso with many customers is more independent than the mafioso with just one. Finally, a powerful customer is always treated with respect. — Diego Gambetta, The Sicilian Mafia The Business of…, 419

Categorization

• XREF: Bargaining-power dependence on outside options (the law as substitute) maps directly onto Schelling’s commitment strength and on the exit-threat structure of the law-merchant model. — connects to: Income distributions reflect actors’ relative bargaining and claimsmaking power.; Risk-shifting contract terms trade against lower produce prices — Henry M. Hart, Jr. and Albert M. Sacks, The Legal Process: Basic Problems in…, 1597