Abstract
To date, most applications of real options theory (ROT) in outsourcing literature are modeled from the clients' side. Little attention has been paid to vendors' options in outsourcing. In this article, we study outsourcing from the vendors' perspective by analyzing vendors' value of waiting. The contribution of our research to the literature lies in our analysis of a model that compensates for vendors' loss of option to wait since they have to exercise outsourcing contracts at clients' given timing. Such a compensation-oriented model yields new insights about the vendors' valuation of outsourcing opportunities, and offers important practical guidance to vendors' decision making.
Original language | English (US) |
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Pages (from-to) | 383-405 |
Number of pages | 23 |
Journal | Decision Sciences |
Volume | 39 |
Issue number | 3 |
DOIs | |
State | Published - Aug 2008 |
All Science Journal Classification (ASJC) codes
- General Business, Management and Accounting
- Strategy and Management
- Information Systems and Management
- Management of Technology and Innovation