Date of Award
9-7-2015
Degree Type
Thesis
Degree Name
Master of Philosophy (MPHIL)
Department
Computing and Decision Sciences
First Advisor
Prof. LIANG, Liping
Second Advisor
Prof. LIU, Liming
Abstract
Multi-target incentive contracts are widely observed in practice to stimulate salesforce effort. However, little is known about their effectiveness and the issues involved in designing them. In this thesis, we investigate the incentive contracting problem between a manufacturer and an agent when the realized sales of a product are affected by both the agent's selling effort and the type of the agent. The agent's type is uncertain to the manufacturer, whereas the agent can observe the actual type when exerting her selling effort. Again, this is unobservable by the manufacturer. For contract design problem, we develop a principal-agent model with both moral hazard and adverse selection. We examine the manufacturer's optimal contract parameter decisions employing a single multi-target contract for the agent who can be of different types. Because menu contracts are commonly studied in literature for the adverse selection problem, we also study a menu of single-target contracts; and examine the manufacturer's optimal contract parameter decisions. We then compare the performance between the two types of contract. We arrive at a number of managerial insights regarding the design and the performance of multi-target contract and menu contract.
Copyright
The copyright of this thesis is owned by its author. Any reproduction, adaptation, distribution or dissemination of this thesis without express authorization is strictly prohibited.
Recommended Citation
Huang, W. (2015). Designing multi-target salesforce incentive contract (Master's thesis, Lingnan University, Hong Kong). Retrieved from http://commons.ln.edu.hk/cds_etd/14/
Included in
Business Administration, Management, and Operations Commons, Management Information Systems Commons