Contractibility and asset ownership: On-board computers and governance in U. S. trucking

George P. Baker, Thomas N. Hubbard

Research output: Contribution to journalArticlepeer-review

124 Scopus citations

Abstract

We investigate how contractual incompleteness affects asset ownership in trucking by examining cross-sectional patterns in truck ownership and how truck ownership has changed with the diffusion of on-board computers (OBCs). We find that driver ownership of trucks is greater for long than short hauls, and when hauls require equipment for which demands are unidirectional rather than bidirectional. We then find that driver ownership decreases with OBC adoption, particularly for longer hauls. These results are consistent with the hypothesis that truck ownership reflects trade-offs between driving incentives and bargaining costs, and indicate that improvements in the contracting environment have led to less independent contracting and larger firms.

Original languageEnglish (US)
Pages (from-to)1443-1479
Number of pages37
JournalQuarterly Journal of Economics
Volume119
Issue number4
DOIs
StatePublished - Nov 2004

ASJC Scopus subject areas

  • Economics and Econometrics

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