Abstract:Fixed-price and time-and-materials contracts are commonly-used contract forms by clients in software outsourcing. The two parties, client and provider, usually renegotiate the testing time after system development occurs. This research investigates the impacts of such renegotiation on the client's contract choice. Our analysis shows that under both contract forms, renegotiation can incentivize the provider's effort, and this effect becomes more influential when the provider has higher bargaining power. Compare… Show more
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