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Call Center Outsourcing Contracts Under Information Asymmetry

Author

Listed:
  • Sameer Hasija

    (School of Management, Binghamton University, State University of New York, Binghamton, New York 13902)

  • Edieal J. Pinker

    (Simon Graduate School of Business, University of Rochester, Rochester, New York 14627)

  • Robert A. Shumsky

    (Tuck School of Business, Dartmouth College, Hanover, New Hampshire 03755)

Abstract

In this paper, we examine contracts to coordinate the capacity decision of a vendor who has been hired by a client to provide call center support. We consider a variety of contracts, all based on our observations of contracts used by one large vendor. We examine the role of different contract features such as pay-per-time, pay-per-call, service-level agreements, and constraints on service rates and abandonment. We show how different combinations of these contract features enable client firms to better manage vendors when there is information asymmetry about worker productivity. In particular, we focus on how different contracts can coordinate by yielding the system-optimal capacity decision by the vendor and consider how profits are allocated between the client and the vendor.

Suggested Citation

  • Sameer Hasija & Edieal J. Pinker & Robert A. Shumsky, 2008. "Call Center Outsourcing Contracts Under Information Asymmetry," Management Science, INFORMS, vol. 54(4), pages 793-807, April.
    • Handle: RePEc:inm:ormnsc:v:54:y:2008:i:4:p:793-807
    DOI: 10.1287/mnsc.1070.0804
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    References listed on IDEAS

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    1. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883, December.
    2. Z. Justin Ren & Yong-Pin Zhou, 2008. "Call Center Outsourcing: Coordinating Staffing Level and Service Quality," Management Science, INFORMS, vol. 54(2), pages 369-383, February.
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    4. Noah Gans & Ger Koole & Avishai Mandelbaum, 2003. "Telephone Call Centers: Tutorial, Review, and Research Prospects," Manufacturing & Service Operations Management, INFORMS, vol. 5(2), pages 79-141, September.
    5. O. Zeynep Akc{s}in & Francis de Véricourt & Fikri Karaesmen, 2008. "Call Center Outsourcing Contract Analysis and Choice," Management Science, INFORMS, vol. 54(2), pages 354-368, February.
    6. Noah Gans & Yong-Pin Zhou, 2007. "Call-Routing Schemes for Call-Center Outsourcing," Manufacturing & Service Operations Management, INFORMS, vol. 9(1), pages 33-50, May.
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