NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

How Wide is the Scope of Hold-Up-Based Theories? Contractual Form and Market Thickness in Trucking

Thomas N. Hubbard

NBER Working Paper No. 7347
Issued in September 1999
NBER Program(s):   IO

How far do the contractual implications of hold-up-based theories (Klein, Crawford, and Alchian (1978), Williamson (1979, 1985)) extend? I investigate this in the context of trucking. Quasi-rents in trucking are generally smaller than in the contexts studied in the previous empirical literature. They vary with hauls' distance and the thickness of local markets. I find that doubling the thickness of the market increases the likelihood that simple spot arrangements govern transactions by about 30% for long hauls. I find weaker evidence of relationships between local market thickness and contractual form for short hauls -- hauls for which quasi-rents are particularly small. Contracts' role as protectors of quasi-rents becomes less important as quasi-rents decrease, but exists over a surprisingly large range.

download in pdf format
   (101 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7347

Published: Hubbard, Thomas N. "Contractual Form And Market Thickness In Trucking," Rand Journal of Economics, 2001, v32(2,Sumer), 369-386.

Users who downloaded this paper also downloaded* these:
Lafontaine and Masten w8859 Contracting in the Absence of Specific Investments and Moral Hazard: Understanding Carrier-Driver Relations in U.S. Trucking
Arnould, Bertrand, and Hallock w7924 Does Managed Care Change the Mission of Nonprofit Hospitals? Evidence From the Managerial Labor Market
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us