Building and Leveraging Asset Specificity for Engendering Institutional Change: The Case of Magnum Photos

Seeking to explain governance forms that obtain, TCE assumes that the institutional environment is static. Hence, the possibility of endogenously driven change in the 'rules of the game' is neglected. We attempt to address this shortcoming by examining a case where transformation of the 'rules' occurred. Specifically, we trace the shift of the assignment of property rights in the field of print media from the client to the photographer. This change was initiated by the pioneering cooperative of freelance photographers -- Magnum Photos. Our preliminary findings indicate that Magnum intentionally built and leveraged asset specificity to modify governance forms pertaining to their exchange relationship. This later diffused through the industry and was adopted as a norm. Our study highlights hitherto unrealized implications of asset specificity.