Performance-Based Contracting: Past, Present, and Future

27 Pages Posted: 3 Jul 2022

See all articles by Sang-Hyun Kim

Sang-Hyun Kim

Yale School of Management

Jose Guajardo

University of California, Berkeley

Serguei Netessine

University of Pennsylvania - The Wharton School

Date Written: June 24, 2022

Abstract

In commemorating Morris Cohen’s illustrious research career, in this paper we examine the genesis and legacy of the research on Performance-Based Contracting, the subject Morris focused on in the years since 2004. Based on the written notes and voice recordings from the early days of research, we provide first-hand accounts of how the research got its start, memorable anecdotes, and the process through which research was developed and conducted. We then discuss the impact of our early research effort by reviewing some of the relevant articles that have appeared in the operations management literature since our collaboration started. The chapter concludes with a discussion of the current state of performance-based contracting in practice, how it may evolve in the future, and what we learned in the process of developing this project.

Keywords: performance based contracting, PBL, spare parts, incentives

Suggested Citation

Kim, Sang-Hyun and Guajardo, Jose and Netessine, Serguei, Performance-Based Contracting: Past, Present, and Future (June 24, 2022). Available at SSRN: https://ssrn.com/abstract=4146005 or http://dx.doi.org/10.2139/ssrn.4146005

Sang-Hyun Kim

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

Jose Guajardo

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

Serguei Netessine (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3730 Walnut Street
Philadelphia, PA 19104-6367
United States
(215) 573 3571 (Phone)

HOME PAGE: http://www.netessine.com

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