The mafioso profits directly from maintained distrust in the market.

Evidence

A more subtle reason might be that the mafioso, in “guaranteeing” the sale of a blind horse to a victim who is not under his protection, is offering a demonstration by reminding everyone that without his protection, cheating is “guaranteed” to occur. The mafioso himself has an interest in making regulated injections of distrust into the market to increase the demand for the good he sells: protection. If agents were to develop trust among themselves, he would become idle. The income he receives and the power he enjoys are primarily the fruits of distrust. — Diego Gambetta, The Sicilian Mafia The Business of…, 62

Categorization

  • XREF: Directly instantiates Gambetta’s own model and parallels Greif’s cultural beliefs analysis — and the deliberate manufacture of distrust resembles the mafia’s strategic manipulation of the information problem in Milgrom et al.’s private-judge framework.
  • QUESTION: Worth chasing: to what extent does the mafia’s demand for protection depend on engineered rather than exogenous distrust? This has testable implications for how mafias react to trust-building interventions.