NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Contractibility and Asset Ownership: On-Board Computers and Governance in U.S. Trucking

George P. Baker, Thomas N. Hubbard

NBER Working Paper No. 7634
Issued in April 2000
NBER Program(s):   CF   IO

We investigate how the contractibility of actions affecting the value of an asset affects asset ownership. We examine this by testing how on-board computer (OBC) adoption affects truck ownership. We develop and test the proposition that adoption should lead to less ownership by drivers, particularly for hauls where drivers have the greatest incentive to drive in non-optimal ways or engage in rent-seeking behavior. We find evidence in favor: OBC adoption leads to less driver ownership, especially for long hauls and hauls that use specialized trailers. We also find that non-owner drivers with OBCs drive better than those without them. These results suggest that technology-enabled increases in contractibility may lead to less independent contracting and larger firms.

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Document Object Identifier (DOI): 10.3386/w7634

Published: Baker, George P. and Thomas N. Hubbard. "Contractibility And Asset Ownership: On-board Computers And Governance In U.S. Trucking," Quarterly Journal of Economics, 2004, v119(4,Nov), 1443-1479.

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