Quota Bonuses as Localized Sales Bonuses

Barna Bakó and András Kálecz‐Simon

Managerial and Decision Economics, 2017, vol. 38, issue 7, 964-970

Abstract: In this article, we compare quota bonuses to profit‐based evaluation and sales (quantity) bonuses in a duopoly setting with independent demand shocks. Contrary to the previous findings, we find that under certain circumstances, either quota bonuses or sales bonuses may be optimal compensation plans. This may explain the coexistence of different bonus schemes in situations where the strategic aspect of the incentive problems is relevant. Copyright © 2017 John Wiley & Sons, Ltd.

Date: 2017
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Working Paper: Quota bonuses as localized sales bonuses (2016)
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