Producers select commissionari competitively based on realized prices.

Evidence

The relationship between commissionari and producers does not appear to rely on coercion. To minimize risk, a producer will give, say, one hundred crates of fruit to one commissionario and one hundred to another. The next time around they give more crates to the scarista who got them the best price. No economist could ask for more clear-cue competitive behavior. For his part, the commissionario does his best to sell at the highest possible price since his income is directly related to that of his supplier. Producers are usually paid after the sale, an arrangement that implies considerable trust between producer and commissionario. Growers who find that a scarista has cheated them, I was told, “punch you in the nose and do not deal with you anymore.” — Diego Gambetta, The Sicilian Mafia The Business of…, 553

Categorization

• XREF: Direct example of Milgrom/Roberts reputation-plus-exit as an alternative to the Mafia’s coercive enforcement — the competitive market here works without third-party private enforcement at all, which complicates Gambetta’s general thesis.