# kaal:claim:3782203-018

**Claim.** Reputation policing games explain why a business will rationally tolerate a small level of theft when policing costs more than the loss, which also explains the rationality of long-term parasitic and bullying relationships and creates a need for careful protocol design to prevent that corruption.

**Type.** mechanism  **Support.** argued

**Holds when.**

- policing costs exceed the value of the losses
- repeated interaction with asymmetric power

**Source quote.**

> Similar game setups with reputation policing explain the situation where a busi- ness will rationally tolerate a small level of theft when policing is more expensive, such as when a grocer will ignore a street urchin who nabs an apple once per day.

**From.** Craig Calcaterra, Wulf A. Kaal, *A Technical Perspective on Decentralization* (2021), Repeated Prisoner’s Dilemma with precommitments, page 13

**Cite as.** Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021). SSRN: https://ssrn.com/abstract=3782203

**Verify.** sha256 of source PDF `ab8a22d0dbb026a09212a4c85963f3c05787cf80775e8613ae3724e3883e7a56` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20and%20Kaal%20-%202021%20-%20A%20Technical%20Perspective%20on%20Decentralization.pdf

**Failure mode.** rationally-tolerated-parasitism  (family: reputation-system-gaming)

**Topics.** institutional-design

**Keywords.** policing-costs, tolerated-theft, protocol-design, exploitation

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.