Incomplete and imperfect information for sales compensation

Raluca Valeanu

Studies and Scientific Researches. Economics Edition, 2010, issue 15

Abstract: Sales force compensation represents the fix and / or variable payment by the company. To compensate agents based on the results, the company set a goal which is brought to their attention through the compensation plan. Applying the model of moral hazard, where the agent behavior cannot be verified, it cannot be specified in the contract what is the expected behavior of the agent. In order to make an offer to contract principal should know the effort that the agent will submit it to define the payment and the contract is determined optimally in trade between the two conflicting objectives of the two participants in the contract. Although agent behavior cannot be verified, the result of this behavior should be measurable at the end of the contract so that the employer may make the contract contingent on effort commission agent for sale of which is measured by the amount of earnings to the company.

Keywords: Incentive compensation; sales agents; incomplete information; contracts theory; moral hazard (search for similar items in EconPapers)
JEL-codes: M (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://sceco.ub.ro/DATABASE/repec/pdf/2010/20101583.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bac:fsecub:10-15-83

Access Statistics for this article

More articles in Studies and Scientific Researches. Economics Edition from "Vasile Alecsandri" University of Bacau, Faculty of Economic Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Bogdan Nichifor ().