Name
Abstract | ||
|---|---|---|
This research utilizes real options theory to investigate how to break the winner's curse in contracting through effective contracting mechanisms. We focus on two contracting approaches: flexible price contract and gain-sharing contract. For reasons of analytical tractability, we first utilize the geometric Brownian motion as the dynamic model to obtain closed-form solutions to break the outsourcing winner's curse. Subsequently, we extend our model to the mean-reverting process and provide numerical examples to verify the validity of our closed-form results, which have not previously been presented in the outsourcing literature. Finally, we provide prescriptions for the problem of the winner's curse in outsourcing. |
Year | DOI | Venue |
|---|---|---|
2010 | 10.1111/j.1540-5915.2010.00281.x | DECISION SCIENCES |
Keywords | Field | DocType |
Flexible Price Contract, Gain-Sharing Contract, Geometric Brownian Motion, Mean-Reverting Process, Outsourcing, Winner's Curse | Mathematical economics,Economics,Curse,Outsourcing,Geometric Brownian motion,Winner's curse,Operations management | Journal |
Volume | Issue | ISSN |
41 | 3 | 0011-7315 |
Citations | PageRank | References |
1 | 0.36 | 2 |
Authors | ||
4 | ||
Name | Order | Citations | PageRank |
|---|---|---|---|
| Bin Jiang | 1 | 23 | 2.70 |
| Srinivas Talluri | 2 | 400 | 37.91 |
| Tao Yao | 3 | 93 | 8.93 |
| Yongma Moon | 4 | 29 | 2.78 |