TY - JOUR
T1 - IT Contract Flexibility and Negotiator Incentives
AU - Mukhopadhyay, Tridas
AU - Walden, Eric
AU - Thompson, Mark A.
N1 - Publisher Copyright:
Copyright © 2015 John Wiley & Sons, Ltd.
PY - 2017/4/1
Y1 - 2017/4/1
N2 - Information Technology outsourcing contracts are plagued by inflexibility. We develop an economic model to explain how the contract negotiator's incentives influence contract flexibility. We show that neither wage nor one-time commission type pay gives any preference for flexibility. However, a promotion incentive, where the bonus is an ongoing bonus, does give the negotiator a preference for less flexible contracts. The preference for less flexible contracts increases as the discount rate increases. The preference for less flexible contracts increases as the number of competitors for the promotion increases.
AB - Information Technology outsourcing contracts are plagued by inflexibility. We develop an economic model to explain how the contract negotiator's incentives influence contract flexibility. We show that neither wage nor one-time commission type pay gives any preference for flexibility. However, a promotion incentive, where the bonus is an ongoing bonus, does give the negotiator a preference for less flexible contracts. The preference for less flexible contracts increases as the discount rate increases. The preference for less flexible contracts increases as the number of competitors for the promotion increases.
UR - http://www.scopus.com/inward/record.url?scp=84947736761&partnerID=8YFLogxK
U2 - 10.1002/mde.2776
DO - 10.1002/mde.2776
M3 - Article
AN - SCOPUS:84947736761
SN - 0143-6570
VL - 38
SP - 291
EP - 301
JO - Managerial and Decision Economics
JF - Managerial and Decision Economics
IS - 3
ER -