© Association for European Transport and contributors 2007 1 AN EXPERIMENTAL ECONOMICS INVESTIGATION OF SHIPPER- CARRIER INTERACTIONS ON THE CHOICE OF MODE AND SHIPMENT SIZE IN FREIGHT TRANSPORT Jose Holguín-Veras Ning Xu Mike Preziosi Rensselaer Polytechnic Institute Gerard de Jong ITS Leeds and Significance Hedi Maurer ITS Leeds 1. INTRODUCTION Freight demand is the result of complex interactions among numerous agents, including: producers, shippers, freight forwarders, carriers (both private and common), receivers, regulatory agencies, to name a few. This should not come as a surprise because it is well known that transportation demand is, in general, a derived demand, which in the case of freight is patently obvious because of the different agents involved; as opposed to the passenger case in which the existence of a sole decision maker, i.e., the passenger, tends to obscure things. As a way to simplify the complex picture in freight, one could re-define and re- group the agents involved so that the focus is placed on the functions most important for modeling purposes: shippers, carriers, and receivers. In the context of this paper, the “shipper” refers to the economic agent(s) associated with the production and the shipping of goods. This, of course, encompasses a multitude of different cases in which companies: produce and ship their own goods, produce goods and let another company handle the shipping, and so on. For purposes of this paper, all these different modalities will be considered part of the “shipper”. The “carrier” represents the companies (e.g., transportation companies, Third Party Logistics providers) that are physically in charge of transporting the goods. As in the previous case, “carriers” represent a very heterogeneous group, ranging from: very small companies with a single truck to conglomerates that operate tens of thousands of trucks; carriers that serve the open market, i.e., “common” or “for-hire”, to carriers that only serve a parent or