Contractibility and Asset Ownership: On-Board Computers and Governance in U.S. Trucking

40 Pages Posted: 16 May 2000 Last revised: 12 Nov 2022

See all articles by George P. Baker

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)

Multiple version iconThere are 2 versions of this paper

Date Written: April 2000

Abstract

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.

Suggested Citation

Baker, George P. and Hubbard, Thomas N., Contractibility and Asset Ownership: On-Board Computers and Governance in U.S. Trucking (April 2000). NBER Working Paper No. w7634, Available at SSRN: https://ssrn.com/abstract=228109

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Thomas N. Hubbard

Northwestern University - Department of Management & Strategy ( email )

Kellogg School of Management
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Evanston, IL 60208
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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