Institutional reputation makes threats more credible than individual threats

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

Categorization

• XREF: Precisely why Bonasera must go to Santino rather than threaten himself: the Corleone family’s reputational capital makes its threats credible, exactly as the insurance company’s obligation to maintain reputation makes its suit threats effective. — connects to: Entry barriers in protected markets need no violence once reputation suffices; A protection firm’s reputation substitutes for and economizes on violence; A threat backed by reputation cannot be unilaterally renounced by its target — Thomas C. Schelling, The Strategy of Conflict, 720 (+6 more)
• ADDENDUM: Supports the third-party enforcement framework of the reading purpose — the reputational ‘pledge’ is what makes the private enforcer’s commitments credible.

Related

• Entry barriers in protected markets need no violence once reputation suffices (similarity 0.85)
• A threat backed by reputation cannot be unilaterally renounced by its target (similarity 0.81)
• Delegating decisions to agents makes threats more credible (similarity 0.79)
• A protection firm’s reputation substitutes for and economizes on violence (similarity 0.79)

Broader Connections

• Delegating decisions to agents makes threats more credible #expands (0.85) — Thomas C. Schelling, The Strategy of Conflict, 330
• Collective-retaliation threat, encoded in honour culture, sustains group trust #exemplifies (0.82)
• Trustworthiness enforced only by contract threats is not genuine trust #complicates (0.72)