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The other reason for the masquerade is to keep the scale small and easily digestible. Most works that employ the masquerade are entry-level genre material and having to consider the global implications would alienate audience members already venturing out of their comfort zone. ''[[Harry Potter]]'' most likely would not have been so successful if it spent a chapter on the United Nations discussing ethical policy of the harvest of dragon parts for wands.
== Masquerade as Cold War ==
Suppose you have vampires, werewolves, magic-users, fairies, [[Magick Chicks|excitable followers of who knows how many semi-obscure gods]], [[Angels, Devils, and Squid]]. They have advantages, all right. But even if collectively The Hidden don't consider The Mundanes a serious threat, they have to deal with each other. Even with a single Hidden group, if they are human-like enough to blend in, they probably have a comparable inclination toward splitting into disagreeable factions.
Do you want to start all-out Armageddon or live your life (especially if it's indefinite)? Well, the other participants and the Mundanes also have self-preservation. And since the Masquerade limits escalation of conflicts, most of the time it allows everyone involved to co-exist with reasonable minimum of effort. So pretty much everyone's long term interest is to keep it quiet.
The less Hidden participants are capable of reliably identifying each other upon encounter, the more [[Fog of War]] Masquerade creates. This separates those who would be on each other's throats and also serves as a deterrent against escalation (and they can see how concealed weapons on small scale and nuclear submarines on large became extra deterrents in the mundane world): if you cannot be sure who, what and how many of them you would have too deal with, and what exactly they can do, it's another good reason to avoid a trouble. Both factors work better [[Mutual Masquerade|with many wildly different participants]], since there are more things to miss or mix up. No one wants to give potential enemies an advantage, so every active participant helps to keep others in the dark; "leaks" happen, but cannot be easily validated, thus more often than not misinform.
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