Abstract
Current outsourcing practices are relatively unsophisticated in comparison with the techniques prescribed by economic theory. Customers end up bearing all long-term risk, and vendors have no direct incentive to achieve long-term system effectiveness.
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Index Terms
- Puzzles in software development contracting
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Contracting Structures for Custom Software Development: The Impacts of Informational Rents and Uncertainty on Internal Development and Outsourcing
Custom software development projects have special informational attributes that have challenged managers for many years: they are associated with information asymmetries regarding user valuation and developer costs, relationship-specific investments, ...
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