Optimal contract design for outsourcing: saving time and money

Xiaowei Zhu, Huimin Li and Dazhi Zheng

International Journal of Business and Systems Research, 2014, vol. 8, issue 3, 278-294

Abstract: We consider a company, or a buyer, that outsources her works to a supplier in order to reduce costs and time-to-market. A game theoretic model is used to design the optimal contracts between the buyer and the supplier under two types of information scenario. Under the full information case, the buyer shares her private cost information with the supplier. Under the asymmetric information case, the buyer does not share her private cost information with the supplier. In both cases, we find the optimum outsourcing price, outsourcing time, and retail price.

Keywords: outsourcing pricing; outsourcing time; contract design; game theory; optimal contracts; retail price; full information; asymmetric information. (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.inderscience.com/link.php?id=63936 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbsre:v:8:y:2014:i:3:p:278-294

Access Statistics for this article

More articles in International Journal of Business and Systems Research from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().