Outsourcing and price-QoS equilibrium for e-commerce and internet firms: IT on-demand

Abstract

Provisioning of on-demand outsourcing capability to e-commerce firms is a pre-occupation of many companies in the IT business and a concern of many e-commerce firms. We present a framework to model the choice of outsourcing, situating it in the context of market equilibrium for e-commerce and the internet sectors. Our framework is quite general and allows for any number of distributions on usage levels, price-QoS tradeoffs, and price and cost structures.