Breaking the Winner's Curse in Outsourcing
利用实物期权理论研究如何通过灵活价格合同和收益分享合同打破外包中的赢家诅咒，先用几何布朗运动得到解析解，再用均值回归过程验证。
ABSTRACT This research utilizes real options theory to investigate how to break the winner's curse in contracting through effective contracting mechanisms. We focus on two contracting approaches: flexible price contract and gain‐sharing contract. For reasons of analytical tractability, we first utilize the geometric Brownian motion as the dynamic model to obtain closed‐form solutions to break the outsourcing winner's curse. Subsequently, we extend our model to the mean‐reverting process and provide numerical examples to verify the validity of our closed‐form results, which have not previously been presented in the outsourcing literature. Finally, we provide prescriptions for the problem of the winner's curse in outsourcing.