Contracts in Offshore Software Development: An Empirical Analysis
Management Science
Convex Optimization
Incentives Between Firms (and Within)
Management Science
A Principal-Agent Model for Product Specification and Production
Management Science
Ethnographic study of collaborative knowledge work
IBM Systems Journal
Simple Relational Contracts to Motivate Capacity Investment: Price Only vs. Price and Quantity
Manufacturing & Service Operations Management
Competition in Service Industries
Operations Research
The Service System Is the Basic Abstraction of Service Science
HICSS '08 Proceedings of the Proceedings of the 41st Annual Hawaii International Conference on System Sciences
Performance Contracting in After-Sales Service Supply Chains
Management Science
Call Center Outsourcing Contracts Under Information Asymmetry
Management Science
The Relational Advantages of Intermediation
Management Science
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Manufacturing & Service Operations Management
Double Counting in Supply Chain Carbon Footprinting
Manufacturing & Service Operations Management
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In this paper, we analyze the contracting issues that arise in collaborative services, such as consulting, financial planning, and information technology outsourcing. In particular, we investigate how the choice of contract type---among fixed-fee, time-and-materials, and performance-based contracts---is driven by the service environment characteristics. We find that fixed-fee contracts contingent on performance are preferred when the service output is more sensitive to the vendor's effort, that time-and-materials contracts are optimal when the output is more sensitive to the buyer's effort, and that performance-based contracts dominate when the output is equally sensitive to both the buyer's and the vendor's inputs. We also discuss how the performance of these contracts is affected with output uncertainty, process improvement opportunities, and the involvement of multiple buyers and vendors in the joint-production process. Our model highlights the trade-offs underlying the choice of contracts in a collaborative service environment and identifies service process design changes that improve contract efficiency.