TY  - JOUR
AU  - Hubbard,Thomas N.
TI  - How Wide is the Scope of Hold-Up-Based Theories?  Contractual Form and Market Thickness in Trucking
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7347
PY  - 1999
Y2  - September 1999
UR  - http://www.nber.org/papers/w7347
L1  - http://www.nber.org/papers/w7347.pdf
N1  - Author contact info:
Thomas Hubbard
615 Leverone Hall
Kellogg School of Management
Northwestern University
Evanston, IL  60208
Tel: 773/834-4074
Fax: 773/702-0458
E-Mail: t-hubbard@kellogg.northwestern.edu
AB  - 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.
ER  -