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SOCIAL SCIENCES

Social sciences examine human behavior, social structures, and interactions in various settings. Fields such as sociology, psychology, anthropology, and economics study social relationships, cultural norms, and institutions. By using different research methods, social scientists seek to understand community dynamics, the effects of policies, and factors driving social change. This field is important for tackling current issues, guiding public discussions, and developing strategies for social progress and innovation.

The Industrial Organization of the Mafia 

By Henry A. Thompson

This paper uses economic reasoning to analyze the organization of one of the most successful criminal groups in modern US history: La Cosa Nostra (LCN). Drawing on recently declassified Federal Bureau of Investigation reports and a hand-collected data set, I argue that the costs of violent disputes are key for an economic understanding of La Cosa Nostra’s core institutions. Violent disputes were costly as they consumed resources, were destructive, and raised the group’s profile. As a member did not bear the full costs of a profile-raising police investigation, each had a perverse incentive to resolve a dispute with violence. Hierarchical firms and a sophisticated court system were the LCN’s solution. They gave bosses the authority and incentive to limit violent disputes and to use violence judiciously. La Cosa Nostra’s longevity and success are, in part, a testament to these institutions’ efficacy.

The Journal of Law and Economics Volume 67, Number 3 August 2024

Social ScienceGuest UserMafia, Industrial Organization, Economic Reasoning, Criminal Group