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Overview: This research paper by University of Pennsylvania investigates how recent advances in Information Technology and Telecommunications have led to real-time monitoring of processes at the site of the provider by a buyer located across the globe. Results are furnished of a comprehensive, multi-year, multi-country survey of the efficacy of monitoring and other instruments of governance in offshore outsourcing projects. The paper provides a game-theoretic model of the dynamics of the buyer-supplier interaction and estimates the modeling primitives from the survey data. This solves the game, analyzes the equilibrium characteristics, and show rich empirical support for the findings from the survey.
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