Islamic belief self-enforced contracts, cutting transaction costs across the Sahara

Evidence

If a dealer is a member of any one bourse in the world federation, he is automatically admitted to the trading floor of all of member bourses. Most diamond dealers frequently transact in foreign bourses. It would be wasteful for dealers to have to learn the trade rules of different bourses and be concerned with the technicalities of concluding legally enforceble agreements in different countries, particularly when many of these countries do not have well functioning judiciaries. — Lisa Bernestein, Opting out of the Legal System, 247 (#expands, via linked claim)

There are, however, particular game situations that lend themselves to enforcible agreement. One is an agreement that depends on some kind of coordination or complementarity. If two people have disagreed on where to meet for dinner; if two criminal accomplices have disagreed on what joint alibi to give; or if members of a business firm or football team have disputed about what prices they will quote or what tactic they will follow, they nevertheless have an overriding interest in the ultimate consistency of their actions. Once agreement is formally reached, it constitutes the only possible focal point for the necessary subsequent tacit collaboration; no one has a unilateral preference now to do anything but what he is expected to do. In the absence of any other means of enforcement, then, parties might be well advised to try to find agreements that enjoy this property of interdependent expectations, even to the extent of importing into their agreement certain elements whose sole purpose is to create severe jeopardy for non-coordination. Tearing the treasure map in half or letting one partner carry the gun and the other the ammunition is a familiar example. — Thomas C. Schelling, The Strategy of Conflict, 312 (#corroborates, via linked claim)

Categorization

• XREF: connects to: Costly Islamic displays enabled trade and credit trust in Africa; Complementary agreements are self-enforcing through interdependence and focal points — Thomas C. Schelling, The Strategy of Conflict, 312; Religious belief withers when governments provide the cooperation religion once supplied. (+6 more)

Related

• Religious belief self-enforces contracts better than secular institutions do (similarity 0.79)

Broader Connections

• Complementary agreements are self-enforcing through interdependence and focal points #corroborates (0.90) — Thomas C. Schelling, The Strategy of Conflict, 312
• Private arbitration systems reduce cross-border transaction costs among traders. #expands (0.90) — Lisa Bernestein, Opting out of the Legal System, 247
• Perceived common interest suffices to generate contract-keeping without prior trust #corroborates (0.85)
• Mutual trust in iterated exchange is selffulfilling through aligned incentives #corroborates (0.82)
• The Sahara desert functioned as a navigable route network rather than a barrier #exemplifies (0.75) — , The Rod and the Child, 4308
• Religious belief withers when governments provide the cooperation religion once supplied. #complicates (0.72)