Call Center Outsourcing Under Information Asymmetry
32 Pages Posted: 14 May 2007
Date Written: July 30, 2007
In this paper we examine contracts to coordinate the capacity decision of a vendor who has been hired by a client to provide call center support. We consider a variety of contracts, all based on our observations of contracts used by one large vendor. We examine the role of different contract features such as pay-per-time, pay-per-call, service level agreements, and constraints on service rates and abandonment. We show how different combinations of these contract features enable firms to better manage vendors when there is information asymmetry about worker productivity. In particular we focus on how different contracts can coordinate by yielding the system-optimal capacity decision by the vendor and consider how profits are allocated between the client and the vendor.
Keywords: Call Center, Staffing, Outsourcing, Contracts
JEL Classification: M12, M55, L14
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