Incentive Research of Information Technology Outsourcing of Both Principal and Agent’s Risk Aversion

Wei XU


The paper mainly analyzes information technology outsourcing incentive problems of both principal and the agent’s risk aversion under unilateral moral hazard. Outsourcing incentive mainly achieves goals of motivation toward the agent through adjustment and balance of the effort level and output sharing proportion. The conclusions are: Firstly, the more the external uncertainties influence, the lower output sharing proportion and effort level are; secondly, the bigger risk aversion is, the lower income both sides will get; thirdly, the bigger the cost coefficient of the agent is, the less income the principal can get. 


IT outsourcing; Incentive; Moral hazard; Risk aversion

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