Customer sharing succeeds when customers are location-fixed, enabling large-scale collusion

Evidence

This type of sharing is particularly successful if customers are “fixed in location and the service or good is delivered to [them]” (Reuter 1987: 7), for policing becomes simpler. Agreements can then embrace a large number of both dealers and customers. In the carting industry “racketeers played a continuing role in the operation of the allocation agreement, primarily through the constant need to mediate disputes-hardly an unexpected situation in a conspiracy that involved the allocation of over 100,000 customers among 300 carters” (Reuter 1987: 11). In the absence of such favorable conditions, whether and to what extent collusion is possible depends on the mafioso’s ability to promote loyalty, and on how easily customers can be identified. — Diego Gambetta, The Sicilian Mafia The Business of…, 527

Categorization

• XREF: The 100,000 customers among 300 carters figure with constant dispute mediation cements the private-judges model from Milgrom et al.