Financial exposure tied to guarantor credibility pushes the mafia to internalize partners

Evidence

A vaccaro (cattle breeder) I interviewed in Palermo succinctly expressed the core elements of the hypothesis I wish to present: “When the butcher comes to me to buy an animal, he knows that I want to cheat him. But I know that he wants to cheat me. Thus we need, say, Peppe [that is, a third party] to make us agree. And we both pay Peppe a percentage of the deal.” This statement has far-reaching theoretical consequences. There are mutual low-trust expectations generating a demand for guarantees on both sides, and there is “Peppe,” a man capable of meeting this demand and trusted by both butcher and vaccaro to be capable of doing so. — Diego Gambetta, The Sicilian Mafia The Business of…, 35 (#responds-to, via linked claim)

Categorization

• XREF: connects to: Mafia enforcement makes distrust rational and blights mutual-benefit competition; The mafia originated in diverse occupational groups sharing reputation as guarantors; Mutual distrust in a transaction generates demand for a third-party guarantor — Diego Gambetta, The Sicilian Mafia The Business of…, 35 (+2 more)

Related

• Mutual distrust in a transaction generates demand for a third-party guarantor (similarity 0.86)
• Selling guarantees rather than information is what produces mafioso behavior (similarity 0.84)
• Financial exposure made mafiosi internalize smugglers to secure their credibility (similarity 0.81)
• The mafia extended its protection skills to raising capital for illicit trades (similarity 0.79)
• A non-partisan third either creates direct contact or arbitrates claims between colliding parties (similarity 0.79)
• Protection substitutes for trust when trust is lacking in transactions (similarity 0.78)
• Mafia protection signals that distrusting others is rational (similarity 0.78)

Broader Connections

• Mafia enforcement makes distrust rational and blights mutual-benefit competition #corroborates (0.82)
• The mafia originated in diverse occupational groups sharing reputation as guarantors #corroborates (0.80)
• Mutual distrust in a transaction generates demand for a third-party guarantor #responds-to (0.75) — Diego Gambetta, The Sicilian Mafia The Business of…, 35
• Illegality prevents mafia reputation from detaching from particular owners, blocking firm expansion #qualifies (0.72)