Contractibility and Asset Ownership: On-Board Computers and Governance in U.S. Trucking
George P. Baker
HBS Negotiations, Organizations and Markets Unit; National Bureau of Economic Research (NBER)
Thomas N. Hubbard
Northwestern University - Department of Management & Strategy; National Bureau of Economic Research (NBER)
Harvard NOM Research Paper No. 00-02
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.
Number of Pages in PDF File: 40
JEL Classification: L1,L2working papers series
Date posted: January 17, 2001
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