Protection firms cannot be bought because reputation is non-transferable
Evidence
In addition to the right to transfer, a second feature which commonly defines property rights is the power to sell. There are, to my knowledge, no recorded cases in which the actual sale of a mafia “firm” has taken place. There are reasons to assume that the process would be cumbersome, perhaps impossibly so. Suppose a prospective buyer informed the boss that he wanted to buy the firm, including customers, work force, networks, and all. Suppose, furthermore, that the boss consented· and they agreed on a price. This would be just the beginning. The whole network of clients and employees would have to be informed, and would have to agree, since they are bound specifically to the present owner. Lacking agreement, some might begin to pull out, initiating a chain reaction which would make credibility crumble until nothing was left to buy or sell. — Diego Gambetta, The Sicilian Mafia The Business of…, 158
Categorization
Category: Causal Relationships
- XREF: Directly tests the reader’s Milgrom/private-judges model: the Mafia firm unit is the individual’s reputation, not a fungible asset — so takeover (hostile) is the only transaction form, exactly as Gambetta’s protection-market theory predicts.
Related
- A protection supplier’s reputation cannot be improvised or replaced quickly. (similarity 0.85)
- Reputation-based ownership cannot be alienated or bequeathed (similarity 0.83)
- Reputation earned in-house, not purchased, is what makes mafia succession possible (similarity 0.81)
- Reputation-based firms resist clear ownership definition (similarity 0.80)
- Mafia reputation cannot be separated from its owner’s body (similarity 0.80)
- In protection markets reputation substitutes for actual service delivery. (similarity 0.79)
- Mafia firm reputation is inseparable from the identity of its current boss (similarity 0.79)
- A protection firm’s reputation substitutes for and economizes on violence (similarity 0.79)
Broader Connections
- In protection markets reputation is the product itself, not the signal of it
#expands(0.92) — Diego Gambetta, The Sicilian Mafia The Business of…, 374 - Illegality prevents mafia reputation from detaching from particular owners, blocking firm expansion
#expands(0.88) — Diego Gambetta, The Sicilian Mafia The Business of…, 167 - One can invest only in reputation, never directly in trustworthiness
#corroborates(0.85) — Russell Hardin, Trust and Trustworthiness, 406 - Hostile takeover is the only means of acquiring a protection firm
#expands(0.80) — Diego Gambetta, The Sicilian Mafia The Business of…, 159