Thesmar, David; Thoenig, Mathias - C.E.P.R. Discussion Papers - 2002
. Outsourcing decisions then balance flexibility gains against hold-up costs of opportunistic behaviour by outside contractors. In … equilibrium, the degree of outsourcing is shown to depend on the degree of product market competition, contractor's bargaining … power, and the volatility of demand shocks. Our main result is that an increase in the degree of outsourcing amplifies the …