Mutual deterrence makes protection firms prefer territorial sharing over war

Evidence

If either of the two firms were aiming to achieve monopoly, or simply feared the opponent was about to do so, war would ensue. If the firms were of comparable force, however, neither could easily prevail, and there would be an incentive to avoid confrontation. Even in cases of disparity, as long as the weaker of the two had sufficient means to inflict a costly retaliation, the stronger firm would hesitate to declare war. It is therefore unlikely that M1 and M2 would try to destroy each other. Sensible protection firms as a result will almost certainly favor the third option and seek a “stable jurisdictional sharing” (Schelling 1984: 182) of customers with other firms in order to ensure abstention from mutual intrusion. — Diego Gambetta, The Sicilian Mafia The Business of…, 187

Categorization

• XREF: This is exactly the Schelling credible-commitment logic the reader flagged as the lens for Bonasera’s appeal and Vito Corleone’s bond-making.
• DEFINE: Explains Schelling’s ‘stable jurisdictional sharing’ as the equilibrium protection firms seek when neither can win outright.