Entry barriers in protected markets need no violence once reputation suffices

Evidence

Second, an “agent” may be brought in as a principal in his own right, with an incentive structure of his own that differs from his principal’s. This device is involved in automobile insurance; the private citizen, in settling out of court, cannot threaten suit as effectively as the insurance company since the latter is more conspicuously obliged to carry out such threats to maintain its own reputation for subsequent accidents. — Thomas C. Schelling, The Strategy of Conflict, 80 (#expands, via linked claim)

Categorization

• XREF: connects to: In protection markets reputation is the product itself, not the signal of it; A protection firm’s reputation substitutes for and economizes on violence; Institutional reputation makes threats more credible than individual threats — Thomas C. Schelling, The Strategy of Conflict, 80 (+2 more)

Related

• Institutional reputation makes threats more credible than individual threats (similarity 0.85)
• A protection firm’s reputation substitutes for and economizes on violence (similarity 0.81)
• A protection firm’s reputation substitutes directly for its enforcement capacity. (similarity 0.79)

Broader Connections

• A protection firm’s reputation substitutes for and economizes on violence #corroborates (0.90)
• In protection markets reputation is the product itself, not the signal of it #expands (0.85)
• Institutional reputation makes threats more credible than individual threats #expands (0.75) — Thomas C. Schelling, The Strategy of Conflict, 80