Early IS-outsourcing research is mainly based on three assumptions: the research results are normative, the decision maker acts in a completely rational manner, and the decision is made at a single point in time. Within the last decade, some of these assumptions have been softened, and studies have attempted to broaden the research by investigating the IS-outsourcing decision process from a more descriptive point of view. Our aim is to extend IS-outsourcing research from a static and mostly rational view to a continuous view with decisions that are influenced by non-rational biases. In this research-in-progress paper, which delineates the conceptual foundation for a larger ongoing research project, we present a research model that depicts some of these non-rational biases based on path dependencies between subsequent decisions. The model states two propositions that can be logically derived from cognitive dissonance and prospect theory: sunk cost influences the adherence of a decision maker to the chosen course of action, and the degree of target achievement of a previous decision influences the risk tolerance of the decision maker in an ensuing decision. An upcoming empirical study using an experimental setting will be conducted to confirm these hypotheses.
Vetter, Johannes; Benlian, Alexander; and Hess, Thomas, "Sunk Cost and Target Achievement Biases in Subsequent IS-Outsourcing Decisions" (2010). ECIS 2010 Proceedings. 23.