Insourcing versus outsourcing in a vertical structure

IF 1.2 4区 管理学 Q3 ECONOMICS Journal of Economics & Management Strategy Pub Date : 2024-02-26 DOI:10.1111/jems.12585
Dongsoo Shin, Roland Strausz
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Abstract

We study an agency model with vertical hierarchy—the principal, the prime-agent and the subagent. The principal faces a project that needs both agents' services. Due to costly communication, the principal receives a report only from the prime-agent, who receives a report from the subagent. The principal can directly incentivize each agent by setting individual transfers (insourcing), or sets only one overall transfer to an independent organization in which the prime-agent hires the subagent (outsourcing). We show that insourcing is always optimal when the principal can perfectly process the prime-agent's report. When the principal's information process is limited, however, outsourcing can be the prevailing mode of operation. In addition, insourcing under limited information process is prone to collusion between the agents, whereas no possibility of collusion arises with outsourcing.

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纵向结构中的内包与外包
我们研究的是一个具有垂直层次结构的代理模型--委托人、主代理和副代理。委托人面对的项目需要两个代理人的服务。由于通信成本高昂,委托人只能从主代理那里收到报告,而主代理则从副代理那里收到报告。委托人可以通过设定单个转让(内包)直接激励每个代理人,也可以只设定一个整体转让给一个独立的组织,由主代理人雇佣副代理人(外包)。我们的研究表明,当委托人能够完美地处理主代理的报告时,内包总是最优的。然而,当委托人的信息处理能力有限时,外包会成为最主要的运作模式。此外,在信息有限的情况下,内包容易导致代理人之间的串通,而外包则不会出现串通的可能性。
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来源期刊
CiteScore
3.20
自引率
5.30%
发文量
43
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