Make Versus Buy in Trucking: Asset Ownership, Job Design and Information / George P. Baker, Thomas N. Hubbard.

Format:

Book

Author/Creator:

Baker, George P.

Contributor:

National Bureau of Economic Research.

Hubbard, Thomas N.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8727.

NBER working paper series no. w8727

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Make Versus Buy in Trucking

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2002.

Summary:

Explaining patterns of asset ownership in the economy is a central goal of both organizational economics and industrial organization. We develop a model of asset ownership in trucking, which we test by examining how the adoption of different classes of on-board computers (OBCs) between 1987 and 1997 influenced whether shippers use their own trucks for hauls or contract with for-hire carriers. We find that OBCs' incentive-improving features pushed hauls toward private carriage, but their resource-allocation-improving features pushed them toward for-hire carriage. We conclude that ownership patterns in trucking reflect the importance of both incomplete contracts (Grossman and Hart (1986)) and of job design and measurement issues (Holmstrom and Milgrom (1994)).

Notes:

Print version record

January 2002.