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The Structure of Incentives in a Major Information Systems Outsourcing Contract: The Case of a North American Public Organization

  • Benoit A. Aubert
  • Michel Patry
  • Suzanne Rivard
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    We use agency theory to shed light on a complex, multi-year outsourcing contract between an important public organization and three major information services outsourcers. The contractual arrangement shows that innovative contracts can be drawn that reduce the scope of supplier opportunism. Nous utilisons la théorie des mandats pour analyser un important et complexe contrat d'impartition. Ce contrat lie pour plusieurs années une importante entreprise publique et trois impartiteurs de services informatiques. L'étude de l'entente montre que certaines innovations contractuelles permettent de réduire l'opportunisme des fournisseurs.

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    File URL: http://www.cirano.qc.ca/files/publications/95s-14.pdf
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    Paper provided by CIRANO in its series CIRANO Working Papers with number 95s-14.

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    Length: 15 pages
    Date of creation: 01 Mar 1995
    Date of revision:
    Handle: RePEc:cir:cirwor:95s-14
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    1. David E. M. Sappington, 1991. "Incentives in Principal-Agent Relationships," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 45-66, Spring.
    2. Bengt Holmstrom, 1997. "Moral Hazard and Observability," Levine's Working Paper Archive 1205, David K. Levine.
    3. Armen A. Alchian & Harold Demsetz, 1971. "Production, Information Costs and Economic Organizations," UCLA Economics Working Papers 10A, UCLA Department of Economics.
    4. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-41, August.
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