Design Of Relational Contract For Service Outsourcing Considering Specific Assets Investment

In the service outsourcing cooperation relationship,the result of the project implementation is related to the degree of participation of the customers,the effort level of service providers and the investment of special assets.The three factors above-mentioned are difficult to be timely observed and verified,which shows the formal contract incompleteness.The existence of opportunism,which increases the risk of specificity investment locked-in problems and bilateral moral hazard problems,results in termination of service outsourcing cooperation agreement and hinders the outsourcing participants long-term development.In view of above,the relational contract of incentive specific asset investment is designed,based on the principal agent theory,from the asset specificity,considering customer enterprise participation behavior and according to the problems of insufficient specific investment and bilateral moral hazard problems.Firstly,through the comparison between the formal contract with the goal of the customer's enterprise profit and the contract with the goal of system revenue,we find that the formal contract cannot effectively guide the participant to work hard.Secondly,the relational contract of incentive specific asset investment is designed under the repeated games,according to the observation difficulty of the level of customers' participation,theeffort level of service providers and the special assets investment.Research shows: The higher the degree of assets,the more unfavorable to the self-implementation of relational contract;When the internal cost saving rate of private assets is higher the more conducive to the self-implementation of relational contract.Finally,the relational contract of incentive specific asset investment is further analyzed under the dynamic games.Self-enforced ability and excitation level of the relational contract under the dynamic games are stronger than the relational contract under the repeated games.The project using relational contract to motivate participant's special assets investment and effort level,it is expected to reveal the mechanism of long-term healthy cooperation of service outsourcing,which is conducive to the sustained and healthy development of service outsourcing industry.