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American Economic Review: Vol. 93 No. 3 (June 2003)
AER Volume. 93, Issue 3 | 
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Make Versus Buy in Trucking: Asset Ownership, Job Design, and Information
Article Citation
Baker, George P., and
Thomas N. Hubbard. 2003. "Make Versus Buy in Trucking: Asset Ownership, Job Design, and Information ."
The American Economic Review,
93(3): 551-572.
DOI: 10.1257/000282803322156981
DOI: 10.1257/000282803322156981
Abstract
Explaining patterns of asset ownership 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 and of job design and measurement issues.
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Full-text Article
Authors
Baker, George P.
Hubbard, Thomas N.
Hubbard, Thomas N.
