4 - Contracting for Geothermal in Hot Springs

Summary

Given the returns to modern equipment, many fishermen face economies of scale they cannot afford. To survive, some entrepreneurial fishermen are moving deliberately up-scale. Rather than sell on the mass-market, they create and service a niche market for premium, high-quality fish. To compete in this market, the entrepreneurial fishermen purposely raise the stakes: on internet sales sites, they post their broader reputations as a bond. In doing so, they increase their vulnerability to a dissatisfied customer. In effect, the fisherman creates among his customers a network of overlapping ties that together constitute closed social capital. In the process, he builds a network that lets him more credibly promise high quality – precisely because his buyers can contact each other, learn how he has behaved in the past, and punish him if he reneges.