TY  - JOUR
AU  - Lafontaine,Francine
AU  - Masten,Scott E.
TI  - Contracting in the Absence of Specific Investments and Moral Hazard: Understanding Carrier-Driver Relations in U.S. Trucking
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8859
PY  - 2002
Y2  - March 2002
UR  - http://www.nber.org/papers/w8859
L1  - http://www.nber.org/papers/w8859.pdf
N1  - Author contact info:
Francine Lafontaine
Ross School of Business
University of Michigan
701 Tappan Street
Ann Arbor, MI  48109
Tel: 734/647-4915
Fax: 734/936-0279
E-Mail: LAF@UMICH.EDU

Scott Masten
University of Michigan Business School
University of Michigan
701 Tappan Street
Ann Arbor, MI  48019-1217
Tel: (734) 764-1389
Fax: (734) 936-6631
E-Mail: semasten@umich.edu
AB  - This paper considers functions of contracting other than the protection of relationship-specific investments and the provision of marginal incentives, and applies the theory to explain variation in the form of compensation of over-the-road truck drivers in the U.S.  Specifically, we argue that contracts in this industry serve to economize on the costs of price determination for heterogeneous transactions.  We show that the actual terms of those contracts vary systematically with the nature of hauls in a way that is consistent with the theory.  By contrast, we find that vehicle ownership, which defines a driver's status as an owner operator or company driver, depends on driver, but not trailer or haul, characteristics.
ER  -