Customers exercise more protection-market choice where the monopoly is insecure

Evidence

Because Catania is on the border of traditional mafia territory, where the mafia’s monopoly is less secure than in western Sicily, customers there have been able to exercise more choice than in Palermo. Catania is notable for the existence of three independent protection groups—the Cursoti, the Carcagnusi, and the Malpassoti—which are not part of the mafia cartel. … According to Calderone, a large building contractor “was protected by an important man from the Cursoti gang.” A dealer in wholesale fish “had a small entourage of undistinguished delinquents, from whom he was receiving protection and to whom he gave a lot of money” — Diego Gambetta, The Sicilian Mafia The Business of…, 418

Categorization

Category: Causal Relationships

• XREF: Pricing power and quality trade-offs among rival protection gangs map to standard market-competition theory the reader is testing.

Related

• Monopoly over a territory is required for credible protection against competitive poaching (similarity 0.82)
• Mafia protection customers range from spot buyers to kin (similarity 0.82)
• Mafia protection is a demanded commodity substituting for trust (similarity 0.82)
• Territorial protection markets are easier to police than functional ones (similarity 0.81)
• Protection is a market where mafiosi may reject customers or bestow protection as gifts. (similarity 0.81)
• Challengers enter protection markets by raising loyalty costs, not by undercutting prices. (similarity 0.80)
• A free market in quality can dissolve the demand for mafia protection (similarity 0.80)
• Protection demand, not commodity prosperity, predicts mafia entry into a market. (similarity 0.80)
• Mafia protection is often genuinely sought after by customers, not merely imposed (similarity 0.80)
• Mafia protection makes collusion more likely, elaborate, and enduring (similarity 0.79)
• Customer preferences for strength and competition are internally contradictory (similarity 0.79)
• Client concentration and violent competition make mafia protection contracts fragile. (similarity 0.79)
• Mafia protection is sold to whoever can pay regardless of class (similarity 0.79)
• Mafia behavior is rational once considered as a protection-selling industry under competitive pressure (similarity 0.79)
• Protection in southern Italy bypassed the state’s monopoly and entered the market (similarity 0.78)

Broader Connections

• Only a bigger monopoly can destroy a smaller local monopoly #exemplifies (0.72) — Diego Gambetta, Trust - Making and Breaking Cooperative…, 2193