Contracting for software development
Management Science
Software Project Duration and Effort: An Empirical Study
Information Technology and Management
The Moderating Effects of Structure on Volatility and Complexity in Software Enhancement
Information Systems Research
Puzzles in software development contracting
Communications of the ACM - Information cities
IT Outsourcing Strategies: Universalistic, Contingency, and Configurational Explanations of Success
Information Systems Research
Learning to Contract: Evidence from the Personal Computer Industry
Organization Science
IT Outsourcing Success: A Psychological Contract Perspective
Information Systems Research
A Transaction Cost Perspective of the "Software as a Service" Business Model
Journal of Management Information Systems
An Empirical Analysis of Contract Structures in IT Outsourcing
Information Systems Research
Contractual Provisions to Mitigate Holdup: Evidence from Information Technology Outsourcing
Information Systems Research
Research Note---Returns to Information Technology Outsourcing
Information Systems Research
Risk assessment in IT outsourcing using fuzzy decision-making approach: An Indian perspective
Expert Systems with Applications: An International Journal
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This paper examines renegotiation design in contracts for outsourced information technology (IT) services. Whereas prior literature in information systems has highlighted the likelihood of ex post rent seeking engendered by renegotiation, we build upon literature on incomplete contracts to posit that renegotiation can be Pareto improving by incorporating contingencies revealed ex post. Research on contract renegotiation has been hampered by two sets of challenges: the lack of appropriate data and empirical challenges in identification. We circumvent this problem both by appropriate data collection and by employing an identification strategy to address alternate causal explanations. We propose a measure, Pareto improving amendments, to assess renegotiation outcomes that enhance the value from outsourcing by hazard equilibration and by incorporating learning. Using a unique sample of 141 IT outsourcing contracts, we examine the role of decision rights delineated ex ante in enabling Pareto improving amendments and in resolving the trade-off between adaptation and rent seeking. We find that flexibility provisions, termination for convenience rights, and contractual rights whereby vendors are granted rights to reuse know-how are associated with Pareto improving amendments. The results are robust to potential endogeneity of contractual provisions when parties have feasible foresight and to the possibility of adverse selection in the sample. We also examine alternate explanations from the literature on contractual breach. Implications for practitioners and researchers are discussed. This paper was accepted by Sandra Slaughter, information systems.