Private enforcement can perversely suppress self-policing among market participants.

Evidence

This conclusion has three consequences. Other things being equal, (a) there will be more lemons sold under the auspices of the mafia even if the mafia itself had no direct interest in their sale. Even assuming that (b) the proportion of dishonest sellers is not higher than in other parts of the world, (a) still holds true. Finally, from (a) it follows that (c) even without an active and intentional effort on the part of the mafioso, the demand for protection will increase. In short, distrust, once addressed through mafioso protection, becomes self-perpetuating and self-expanding. Distrust, in other words, becomes endogenous and need no longer be thought of as a precondition external to the mafia protection market. — Diego Gambetta, The Sicilian Mafia The Business of…, 70 (#expands, via linked claim)

Categorization

• XREF: connects to: Mafia protection suppresses the emergence of honest-dealing business norms.; Mafia enforcement makes distrust rational and blights mutual-benefit competition; Mafia protection makes distrust self-perpetuating and endogenous. — Diego Gambetta, The Sicilian Mafia The Business of…, 70 (+4 more)

Related

• Mafia protection suppresses the emergence of honest-dealing business norms. (similarity 0.95)
• Mafia protection makes distrust self-perpetuating and endogenous. (similarity 0.91)
• The mafioso profits directly from maintained distrust in the market. (similarity 0.85)
• Mafia protection requires maintaining relations with the underworld it polices (similarity 0.85)
• The mafia persists as a stable equilibrium that profits from distrust (similarity 0.82)
• A free market in quality can dissolve the demand for mafia protection (similarity 0.82)
• Mafia protection paradoxically increases the number of lemons sold. (similarity 0.82)
• The mafia can be understood as an industry selling private protection (similarity 0.82)
• Mafia protection makes collusion more likely, elaborate, and enduring (similarity 0.82)
• The mafioso profits from deliberately injecting distrust into markets (similarity 0.82)
• Mafia protection signals that distrusting others is rational (similarity 0.81)
• Mafia enforcement makes distrust rational and blights mutual-benefit competition (similarity 0.81)
• Mafia behavior is rational once considered as a protection-selling industry under competitive pressure (similarity 0.80)
• Mafiosi emerged as private enforcers of a public justice the state eroded (similarity 0.80)
• Mafia protection treats crime as disputes, not offenses (similarity 0.79)

Broader Connections

• Mafia protection suppresses the emergence of honest-dealing business norms. #exemplifies (0.85)
• Mafia enforcement makes distrust rational and blights mutual-benefit competition #expands (0.85)
• Mafia protection makes distrust self-perpetuating and endogenous. #expands (0.82) — Diego Gambetta, The Sicilian Mafia The Business of…, 70