Reputation is nontransferable so successors must publicly signal competence

Evidence

In theory, certain conditions are necessary for a smooth succession. As the reputation of the “owner” is not transferable, the appointed successor must show that he will be at least as good as his predecessor in handling the firm. His skill must be apparent to all concerned before the succession can actually take place. A challenge from a stronger candidate, or simply the flight of nervous customers to a more credible protector, could bankrupt the successor overnight. If no such preparation has taken place, however—say, if the owner disappears suddenly from the scene for reasons unconnected with the succession itself—violent conflict is likely to be the means by which the dispute is settled. In any case, informing others of the successor’s identity is of paramount importance. After Carmelo Colletti’s death, a meeting was held at Gennaro Sorcino’s house to patch up what remained of the family. At the end of the meeting the participants proceeded to the town’s main bar, in full public view, respecting an ordine di parata(parade order) based on hierarchy: at the head marched Sortino, Colletti’s brother-in-law and adviser, and emissary of the family to the United States. According to investigators, this parade served to inform the public of the position Sortino had attained within the family, and to present his credentials as the authorized mediator (OSAG Arnone: 123-124). — Diego Gambetta, The Sicilian Mafia The Business of…, 157

Categorization

• XREF: The public parade as a costly, credible signaling act maps directly onto Schelling’s commitment mechanisms and the reader’s focus on how trust transfers; also parallels Milgrom’s private judges whose authority must be publicly certified. — connects to: the MOC “The Violence That Builds: How Modern Order Is Forged, Not Broken, by Force”
• DEFINE: Introduces ordine di parata (parade order) as the hierarchical public ritual used to certify a successor’s authorized mediation role.