American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Long-Term Relationships in the US Truckload Freight Industry
American Economic Journal: Microeconomics
vol. 17,
no. 1, February 2025
(pp. 308–53)
Abstract
This paper provides evidence on the scope and incentive mechanisms of long-term relationships in the US truckload freight industry. In this setting, shippers and carriers engage in repeated interactions under fixed-rate contracts that allow for inefficient opportunism. The main dynamic mechanism involves shippers using the threat of relationship termination to deter carriers from short-term opportunism. This threat and the potential of future rents induce more carrier cooperation. We test this mechanism against likely alternatives and analyze relationship scope for different carrier types. We find that incentive schemes do not exploit the full temporal and spatial scope of relationships.Citation
Harris, Adam, and Thi Mai Anh Nguyen. 2025. "Long-Term Relationships in the US Truckload Freight Industry." American Economic Journal: Microeconomics, 17 (1): 308–53. DOI: 10.1257/mic.20210343Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- D82 Asymmetric and Private Information; Mechanism Design
- L14 Transactional Relationships; Contracts and Reputation; Networks
- L92 Railroads and Other Surface Transportation
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