A central proposition of the transaction costs literature is that firms will substitute more complicated contractual arrangements for simple spot arrangements when transactions involve relationship-specific investments. I investigate this proposition by testing whether simple spot arrangements are less common when local trucking markets are thin. I find that doubling the thickness of the market increases the likelihood that simple spot arrangements govern transactions by about 30% for long hauls. I find weaker evidence of relationships between local market thickness and contractual form for short-hauls for which quasi-rents are particularly small. Contracts protect quasi-rents over a surprisingly large range, but they play a less important role as quasi-rents decrease. Copyright 2001 by the RAND Corporation.
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Volume (Year): 32 (2001) Issue (Month): 2 (Summer) Pages: 369-86 Download reference. The following formats are available: HTML
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Jorge Tarziján M, 2003.
"Revisando La Teoria De La Firma,"
Abante,
Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 6(2), pages 149-177.
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