Intermittent protection contracts fail because they create ambiguity for predators

Evidence

It might be objected that Don Peppe could sell protection to Mr. X on, say, a monthly basis. This solution, however, would suit neither Don Peppe nor Mr. X. In the first place, they would waste their time bargaining every month. But there would also be two other, more serious consequences if the contract were only intermittently renewed: Mr. X would be vulnerable to predators in his unprotected months and so could not make long-term plans for investment; and, Don Peppe would be obliged to keep indicating to predators when Mr. X was untouchable and when he was fair game. The undesirable effects would be twofold: predators might become confused and attack Mr. X in the wrong month; alternatively, Mr. X might remain safe during a month when he had not paid, thereby enjoying free protection. In addition, Don Peppe could not easily monitor all former clients who might continue to use his name even when they were no longer paying for the right. — Diego Gambetta, The Sicilian Mafia The Business of…, 147

Categorization

• XREF: The wrong-month/free-protection problem parallels Schelling’s signaling and commitment literature, and Milgrom’s finding on why courts need continuous institutional presence rather than episodic enforcement.
• SEED: Article angle: why security contracts in any domain trend toward fully comprehensive terms — the same ambiguity-of-coverage logic appears in insurance, managed IT, and law-firm retainers.