Service competition for IT service outsourcing

Pao Li Kuo, Chung Chi Hsieh

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Citation (Scopus)

Abstract

With IT outsourcing being a widely adopted business strategy, the objective of this study is to identify the status of competition as a mechanism for the client to induce service quality from the service providers. This paper brings up a game model of service level competition between two vendors with different marginal costs in a two-period framework. We find that there is no pure strategy in the vendors' service levels and derive the explicit form of the mixed-strategy equilibrium for the vendors. Our results show that the vendor with higher marginal cost normally would provide a minimum service level, which is required by the client, and sometimes randomize its service level, whereas the vendor with lower marginal cost is likely to provide a service level higher than the minimum service level, and is more likely to obtain a larger portion of the outsourced IT services.

Original languageEnglish
Title of host publication3rd International Conference on Innovative Computing Information and Control, ICICIC'08
DOIs
Publication statusPublished - 2008 Sep 30
Event3rd International Conference on Innovative Computing Information and Control, ICICIC'08 - Dalian, Liaoning, China
Duration: 2008 Jun 182008 Jun 20

Publication series

Name3rd International Conference on Innovative Computing Information and Control, ICICIC'08

Other

Other3rd International Conference on Innovative Computing Information and Control, ICICIC'08
CountryChina
CityDalian, Liaoning
Period08-06-1808-06-20

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All Science Journal Classification (ASJC) codes

  • Computer Science Applications
  • Software
  • Control and Systems Engineering

Cite this

Kuo, P. L., & Hsieh, C. C. (2008). Service competition for IT service outsourcing. In 3rd International Conference on Innovative Computing Information and Control, ICICIC'08 [4603464] (3rd International Conference on Innovative Computing Information and Control, ICICIC'08). https://doi.org/10.1109/ICICIC.2008.490