The mafia persists as a stable equilibrium that profits from distrust

Evidence

Even though it ultimately prevents economic development, the mafia market has its own intrinsic tenacity. It is an equilibrium: no one has an immediate interest to behave differently and fight it even if one sees its drawbacks. Miserable and unreliable it may be, but the mafia’s protection succeeds in making a profit from distrust, thus satisfying the interests of many. — Diego Gambetta, The Sicilian Mafia The Business of…, 28

Categorization

  • XREF: The ‘profit from distrust’ mechanism echoes the reader’s Milgrom/Gambetta frame: the mafia survives because individual actors lack incentives to defect from the equilibrium. Also parallels Coleman’s social capital discussion of shared capital’s collective-action problems. — connects to: Selective initiation into the Mafia serves as an efficient behavioral guarantee; Mafia norms function as a self-perpetuating Nash equilibrium; The mafia persists in a turbulent equilibrium without monopoly or dissolution (+4 more)
  • DEEPTHINKING: The equilibrium-as-tenacity argument — where the very inefficiency of the market is what makes it stable — is a dense, counterintuitive point with broad reach beyond the mafia case.
  • corroborated: 2 independent passages support this claim — Diego Gambetta, The Sicilian Mafia The Business of…, 28

Broader Connections