Paying judgments signals reliability even more strongly than avoiding disputes.
Evidence
Furthermore, it may be that the information most important to the reputation market is not that a dealer has been involved in a dispute or even that he has breached a contract, but rather that he has been prepared to either settle disputes or abide by the judgments of the arbitral tribunal when a third-party adjudication was necessary. — Lisa Bernestein, Opting out of the Legal System, 241
Categorization
- CANDY: Fun counterintuitive nugget: in the diamond trade, being involved in a dispute and settling it honorably may boost your reputation more than never being in one.
- XREF: connects to: Reputation can substitute for legal enforceability in evaluating contracts. — Lisa Bernestein, Opting out of the Legal System, 213; Potential to sanction breaches is the strongest basis for trusting another.
Related
- A reputation market can value norm-following more than dispute outcomes. (similarity 0.84)
- Diamond trade discipline runs on reputation fear, not arbitration or courts. (similarity 0.82)
- Reputation can substitute for legal enforceability in evaluating contracts. (similarity 0.79)
- Diamond dealers’ reliance on timely payment makes nonpayment harm exceed its face value. (similarity 0.78)
- Tight cash-flow margins make reliance harms exceed simple owed amounts in the diamond trade (similarity 0.78)
- Reputation, not third-party enforcement, governs diamond market transactions. (similarity 0.78)
Broader Connections
- Potential to sanction breaches is the strongest basis for trusting another.
#qualifies(0.75) - Reputation can substitute for legal enforceability in evaluating contracts.
#complicates(0.70) — Lisa Bernestein, Opting out of the Legal System, 213