Post by Bitcoin Dictionary

A principal may secure delegated control by cultivating loyalty to either a person or an office. I show an impossibility: when agents observe only the current holder of control, no loyalty bond can both deter appropriation and transfer intact to a lawful successor. Loyalty to an office is portable but rewards a usurper as surely as a successor; loyalty to an individual distinguishes appropriation but expires at succession. A recognized succession procedure breaks this equivalence. With imperfect recognition, monetary incentive costs fall with the probability that an unlawful transfer is correctly classified. The result interprets legitimacy as a technology for making loyalty capital transferable.