Farmers historically paid middlemen premiums to reduce transaction anxiety

Evidence

Once farmers were afraid to deal with city slickers, preferring to rely on a middleman whom they could regard as a friend. In doing so they traded higher profits for reduced anxiety. Today’s young farmers are not so timid; they deliver in person to the market. — Diego Gambetta, The Sicilian Mafia The Business of…, 552

Categorization

• XREF: This is a textbook trust-cost tradeoff: farmers accept lower returns to avoid unfamiliar counterparty risk — directly parallels the reader’s private-protection framework about when intermediaries substitute for trust.