Desmond Lo
Santa Clara U.



(Monday, 16th May 2011)

Title : The Economics of Sales-Force Contracts in Distribution Channels

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As an alternative of using vertical intermediaries such as distributors and resellers, direct sales force owned by companies also plays an important role in distribution channels. This workshop intends to offers an overview of agency-related arguments used in studies on sales force contracts, with an emphasis in empirical testing and theoretical explorations. Workshop topics include the dual role of performance pay in resolving moral hazard issues and selecting the desired type of agents. The workshop will further discuss decision-rights allocation, in particular, delegation of pricing authority, and its relationship with performance pay.

Papers for reference:

Background Reading:

  • Prendergast, Canice (2002). "The Tenuous Trade-Off between Risk and Incentives," Journal of Political Economy, 110(5), 1071-1102.