In protection markets reputation substitutes for actual service delivery.

Evidence

Of course, with ordinary commodities in which it is easy to tell good from bad, a good name cannot survive consumer dissatisfaction with the product. But what the mafia or political parries sell are nor ordinary commodities. We have already seen that reputation is the asset the mafia values most. Its benefits are enormous since once a reputation exists in the protection trade, it is scarcely necessary to produce the real thing. Reputation, so long as nobody challenges it, is the real thing. — Diego Gambetta, The Sicilian Mafia The Business of…, 374

Categorization

• XREF: Core confirmation of the Gambetta private-protection model the reader is testing; reputation-as-product substitutes for delivery aligns with the one-shot cheating problem from Milgrom et al.