Compensation plan for competing salespersons under asymmetric information

Chung-Yee Lee and Ruina Yang

European Journal of Operational Research, 2013, vol. 227, issue 3, 570-580

Abstract: We investigate the optimal compensation scheme involving one firm and two competing salespersons deployed in different territories under asymmetric information. The problem is analyzed using a two-stage game. In the first stage, the firm announces the compensation plans. The two salespersons, who are closer to customers, have superior market information and then simultaneously but independently decide which plans to sign. The firm decides the production quantity and the salespersons independently make effort decisions. In the second stage, sales volumes are realized and the associate payments are made.

Keywords: Supply chain management; Competing salespersons; Asymmetric information; Quota-based compensation plan (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:227:y:2013:i:3:p:570-580

DOI: 10.1016/j.ejor.2013.01.007

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