Coalition-Proofness in Aggregative Games with Strategic Substitutes and Externalities

2012 ◽  
Author(s):  
Federico Quartieri ◽  
Ryusuke Shinohara
Keyword(s):  
Strategic Substitutes ◽  
Aggregative Games

Evolution of Interdependent Preferences in Aggregative Games

2000 ◽  
Vol 31 (2) ◽  
pp. 303-310 ◽  
Author(s):  
Levent Koçkesen ◽  
Efe A. Ok ◽  
Rajiv Sethi
Keyword(s):  
Interdependent Preferences ◽  
Aggregative Games

Coordination and learning in games with strategic substitutes and complements

2019 ◽  
Vol 73 (1) ◽  
pp. 53-65
Author(s):  
Anne-Christine Barthel ◽  
Eric Hoffmann ◽  
Andrew Monaco
Keyword(s):  
Strategic Substitutes ◽  
Learning In Games

Auctioning IT Contracts with Renegotiable Scope

2021 ◽  
Author(s):  
He Huang ◽  
Zhipeng Li ◽  
De Liu ◽  
Hongyan Xu
Keyword(s):  
Bargaining Power ◽  
It Outsourcing ◽  
Quality Uncertainty ◽  
Strategic Substitutes ◽  
Fixed Price ◽  
Ex Post ◽  
Information Rent ◽  
High Investment ◽  
Two Measures

Motivated by challenges facing IT procurement, this paper studies a hybrid procurement model in which a reverse auction of a fixed-price IT outsourcing contract may be followed by renegotiation to extend the contract’s scope. In this model, the buyer balances the needs to incentivize noncontractible vendor investment and to curb the winning vendor’s information rent by choosing the initial project scope and the buyer’s investment in the quality of the project. We find that a buyer may benefit from inducing ex post renegotiation to motivate vendor investment, especially when the winning vendor has high bargaining power and the quality uncertainty is low. Broadening the initial scope reduces information rent but leaves little room for ex post renegotiation and, hence, discourages vendor investment, whereas increasing the buyer’s investment has opposite effects. Interestingly, the two measures can be strategic substitutes or complements depending on the likelihood of the renegotiation and the two parties’ bargaining powers. The buyer may strategically set a low initial project scope and high investment to incentivize renegotiation and vendor investment, which may explain why many IT outsourcing projects start small and allow expansions. Our findings also generate several testable predictions for IT outsourcing. This paper was accepted by Kartik Hosanagar, information systems.

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