Asset specificity determines when market safeguards give way to relational trust

Evidence

Once firms are locked into a relation owing to investment in specific assets, such policies no longer apply. It is then impossible to refer to the market to ensure competitive pricing. … In the case of physical assets (machine tools etc.) it is extremely rare for subcontractors to invest in machinery specific to a particular client’s requirements. I only came across one significant example. The problem potentially arises in the case of tooling, that is specialized dies and moulds for forging and casting, and specialized fixtures and cutting tools for component machining. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 2576

Categorization

• XREF: Echoes Williamson’s asset-specificity framework and grounds where Luhmann-style trust as risk-acceptance actually bites — the exact zone Saramago’s blindness epidemic destroys.
• QUESTION: Worth chasing: does the tooling case demonstrate where trust becomes forced rather than chosen, analogous to the doctor’s wife becoming the lone sighted guarantor?