NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Make Versus Buy in Trucking: Asset Ownership, Job Design and Information

George P. Baker, Thomas N. Hubbard

NBER Working Paper No. 8727
Issued in January 2002
NBER Program(s):   IO   LS

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)).

download in pdf format
   (377 K)

email paper

This paper is available as PDF (377 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8727

Published: Baker, George P. and Thomas N. Hubbard. "Make Versus Buy In Trucking: Asset Ownership, Job Design, And Information," American Economic Review, 2003, v93(3,Jun), 551-572.

Users who downloaded this paper also downloaded these:
Hubbard w8525 Information, Decisions, and Productivity: On-Board Computers and Capacity Utilization in Trucking
Lafontaine and Masten w8859 Contracting in the Absence of Specific Investments and Moral Hazard: Understanding Carrier-Driver Relations in U.S. Trucking
Baker and Hubbard w7634 Contractibility and Asset Ownership: On-Board Computers and Governance in U.S. Trucking
Atalay, Hortacsu, and Syverson w18020 Why Do Firms Own Production Chains?
French and Poterba w3609 Investor Diversification and International Equity Markets
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

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

Contact Us