Professional trust in known colleagues resists cheaper substitutes more than cost logic predicts.

Evidence

As with professionals in many fields, primary care physicians (PCPs) often develop levels of comfort in and confidence with radiologists who are known quantities: absent compelling reasons, it will often be difficult to persuade PCPs to work with new radiologists with whom they have even fewer personal and professional connections. This is true even for intra-national changes, so efforts to offshore this work internationally will be even more difficult. While professional confidence can be established over time, the very notions of path dependence and behavioural lock-in highlight that it is often difficult to break free of established formal and informal relationships. — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 570

Categorization

• XREF: Echoes the diamond-bourse and Milgrom literature on reputation regimes: relational trust lowering transaction costs can also lock a market into incumbents.