Do Firms and Markets Look Different? Repeat Collaboration in the Feature Film Industry, 1935-1995

This paper contributes to a growing literature that finds a surprising degree of structure in the exchange networks that comprise a market. Standard neoclassical theory depicts the market as fluid system with little repeated exchange between pairs of agents. And while economists have recently begun to pay greater attention to more restricted networks of exchange, such networks are typically viewed as symptomatic of a nonmarket environment. The expectation that the market has little repeat exchange is particularly strong in such contexts as the feature film industry, where few transaction-specific investments are made and where third-parties are able to monitor and broadcast information about poor performance (Caves 2000: 96). Yet my analysis of comprehensive data from the Internet Movie Database shows a significant level of repeat collaboration among actors, directors, and producers throughout the period under study, 1933-1995. Moreover, the shift from the era of the studio system, when career choices were subject to the authority of studio management, to the contemporary market-based system was not associated with a corresponding decline in repeat collaboration. This result reinforces recent research indicating the need for rethinking traditional imagery of the market and the firm as fundamentally opposed modes of economic organization.