I think underground economic organizations have a social cohesion that legitimate trade lacks, though. There's a reason that terms like "cosa nostra" ("our thing") are used, and why so many gangs inspire a fierce, blood relative-like loyalty, whereas you'd be hard-pressed to find that kind of strong social bonding in above ground organizations.
I disagree - if you head out to any small or medium sized "town" (my own, for example), you'll see the same kind of social bonding, loyalties, and cohesion amongst the people at organizations and even between organizations themselves.
Coincidentally, this is also the code of honor at school/kindergarten.
I wonder what the explanation could be behind this notion of opposing authority to help your peers even when it is costly to you in the short term. Does a game theory explanation exist?
From what I've read most nations occupied by an enemy force develop a similar code of honor in regards to the aggressor.
Yeah, it exists in a lot of different sectors of society. Police have the "blue wall of silence", animal liberationists have "security culture", Baltimore gang members have "stop snitching", Marxists have "revolutionary discipline", it goes on and on.
I think if anything, the game theory response is determined by a distrust of the impartiality of authority. The Boondocks actually had a really good dissection about why "Stop Snitching" caught on.
Specifically, 1m 45s in. It also doesn't touch on that often talking to the police can be used by the police as pretext to crack down on unrelated crimes. So when you think you're doing good, next thing you know, your cousin is getting arrested for having a small amount of weed in their room.
I think any social organization that has something to worry about when it comes to loose lips learns very quickly that you either learn to keep your mouth shut and value your social relationships well, or your social organization ceases to exist.
In a way, social networking puts us all in that kind of situation. Many of us do illegal, socially unaccepted, or consequential things, although what we do may not be morally objectionable at all. We haven't learned yet what the criminal organizations have, which is to a) keep your mouth shut, and b) choose your friends wisely.
Instead, people tend to look towards technical solutions like cryptography.
Game-theoretically, defecting only dominates in the one-shot prisoner's dilemma; the iterated prisoner's dilemma has other solutions which can resemble Omerta.
