DEREGULATION AND INFORMATION COSTS

The paper examines the cost of information acquisition related to shippers costs after deregulation of the motor carrier industry (Motor Carrier Act 1980). Before deregulation, rates were consistent and published throughout the industry while post deregulation rates are generally lower but vary greatly among carriers and change frequently. This rate ambiguity results in increased information obtaining costs for shippers and are compared with the savings from lower rates. Information costs are discussed in a traditional welfare analysis model. Results indicate that deregulation was beneficial to shippers as the estimated savings to shippers were $7.1 billion while information costs were $6.3 billion. Methods to reduce information costs include long-term contracts/partnerships with carriers, information brokers, and private carriage.

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  • Accession Number: 00605362
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Mar 31 1991 12:00AM