MARCOS SINGER () (Escuela de Administración, Pontificia Universidad Católica de Chile) PATRICIO DONOSO () (Escuela de Administración, Pontificia Universidad Católica de Chile) SVEN WIDDEL () (Escuela de Administración, Pontificia Universidad Católica de Chile)
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We develop an agency model subject to moral hazard to evaluate whether delivery prices reward carriers for their performance, or arbitrarily benefit some carriers and harm others. From the model, we derive several propositions that we test on a panel data of 58 carriers that work for a shipper in Santiago, over 93 weeks. We verify that the shipper rewards the experience, fleet size and service quality provided by the carrier, but not the quality of the trucks. The carrier has incentives to visit many clients, but not to travel longer distances. We also confirm that prices are sensitive to the alternatives to the agreement between the shipper and the carrier. However, a number of carriers are over or under compensated for no apparent reason.
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Article provided by Escuela de Administracion. Pontificia Universidad Católica de Chile. in its journal ABANTE.
Volume (Year): 10 (2007) Issue (Month): 1 () Pages: 21-55 Download reference. The following formats are available: HTML,
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Find related papers by JEL classification: L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
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