Make Versus Buy in Trucking: Asset Ownership, Job Design, and Information
Thomas N. Hubbard
Northwestern University - Department of Management & Strategy; National Bureau of Economic Research (NBER)
George P. Baker
HBS Negotiations, Organizations and Markets Unit; National Bureau of Economic Research (NBER)
American Economic Review, Forthcoming
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 and of job design and measurement issues.
JEL Classification: D23, L14, L22, L23, L92Accepted Paper Series
Date posted: February 7, 2003
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