Valuate Outsourcing Contracts from Vendors' Perspective: A Real Options Approach

@article{Jiang2008ValuateOC,
  title={Valuate Outsourcing Contracts from Vendors' Perspective: A Real Options Approach},
  author={Bin Jiang and Tao Yao and Baichun Feng},
  journal={Decision Sciences},
  year={2008},
  volume={39},
  pages={383-405}
}
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… CONTINUE READING

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