Reaffirming Relationship-Specific Investments: Comments on Miwa and Ramseyer’s ‘Rethinking Relationship-Specific Investments’

I, too, have a work-related anecdote from my youth to relate. During one summer break from college, I had a job on the night shift in the canning plant of a Coca-Cola bottling franchisee in my hometown in New Hampshire. The process of canning tonic (known as “soda” outside of New England) consisted of three stages, beginning with the fabrication of cans in a room at one end of the building and concluding with the filling and sealing operations in a room at the other end. In between, workers in a third room inspected cans as they arrived by conveyor from the fabrication facility, loaded empty cans onto pallets for storage, and unloaded cans of the appropriate type (Coke, Tab, and Shasta) back onto the conveyor to assure a continuous supply of containers to the filling room “downstream.” The year was 1976 and Oliver Williamson’s Markets and Hierarchies, published just the year before, had not yet found its way into the undergraduate cu”iculum. Nevertheless, I recall finding it curious at the time to learn that the can fabrication operation in the adjoining room was a separate company from the bottling franchise that stored, filled, and, ultimately, distributed the cans.