search query: @indexterm Information technology / total: 1908
reference: 232 / 1908
Author: | Kalnins, A. Mayer, K.J. |
Title: | Relationships and hybrid contracts: an analysis of contract choice in information technology |
Journal: | Journal of law, economics and organization
2004 : APR, VOL. 20:1, p. 207-229 |
Index terms: | Contracts Information technology |
Language: | eng |
Abstract: | Selecting the type of contract is an important aspect of governing interfirm transactions. This paper examines the use of fixed-fee and time-and-materials (T&M, or cost-plus) contracts and a hybrid contract that consists of a T&M contract with a cap. In addition to uncertainty and measurement factors, a relatively un-explored aspect of contracting, namely how the prior relationship between the companies influences the type of contract the companies select, is addressed. The results indicate that T&M contracts are preferred when the cost of measuring quality ex post is high and when it is difficult to estimate costs ex ante. |
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