TY  - JOUR
AU  - Baker,George P.
AU  - Hubbard,Thomas N.
TI  - Make Versus Buy in Trucking: Asset Ownership, Job Design and Information
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8727
PY  - 2002
Y2  - January 2002
UR  - http://www.nber.org/papers/w8727
L1  - http://www.nber.org/papers/w8727.pdf
N1  - Author contact info:
George Baker
Harvard Business School
Morgan Hall 440
Boston, MA 02163
Tel: 617/495-6119
Fax: 617/496-4191
E-Mail: gbaker@hbs.edu

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  - 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)).
ER  -