Incentive Design for Operations-Marketing Multitasking

Published Online:https://doi.org/10.1287/mnsc.2020.3651

References

  • Anupindi R , Dada M , Gupta S (1998) Estimation of consumer demand with stock-out based substitution: An application to vending machine products. Marketing Sci. 17(4):406–423.LinkGoogle Scholar
  • Arya A , Glover J , Mittendorf B (2007) Aligning incentives by capping bonuses. Antle R, Gjesdal F, Liang PJ, eds. Essays in Accounting Theory in Honour of Joel S. Demski (Springer, New York), 169–182.CrossrefGoogle Scholar
  • Atalı A , Lee HL , Özer Ö (2009) If the inventory manager knew: Value of visibility and RFID under imperfect inventory information. Working paper, Stanford University, Palo Alto, CA.Google Scholar
  • Baiman S , Netessine S , Saouma R (2010) Informativeness, incentive compensation, and the choice of inventory buffer. Accounting Rev. 85(6):1839–1860.CrossrefGoogle Scholar
  • Barvinok A (2002) A Course in Convexity (American Mathematical Society, Providence, RI).CrossrefGoogle Scholar
  • Beck A , Peacock C (2009) New Loss Prevention: Redefining Shrinkage Management (Palgrave Macmillan, Basingstoke, UK).CrossrefGoogle Scholar
  • Besbes O , Muharremoglu A (2013) On implications of demand censoring in the newsvendor problem. Management Sci. 59(6):1407–1424.LinkGoogle Scholar
  • Beyer A , Guttman I , Marinovic I (2014) Optimal contracts with performance manipulation. J. Accounting Res. 52(4):817–847.CrossrefGoogle Scholar
  • Bond P , Gomes A (2009) Multitask principal-agent problems: Optimal contracts, fragility, and effort misallocation. J. Econom. Theory 144(1):175–211.CrossrefGoogle Scholar
  • Chao GH , Iravani SMR , Savaskan RC (2009) Quality improvement incentives and product recall cost sharing contracts. Management Sci. 55(7):1122–1138.LinkGoogle Scholar
  • Chen K-Y , Li S , Rong Y (2020) The behavioral promise and pitfalls in compensating store managers. Management Sci. Forthcoming.Google Scholar
  • Chu LY , Lai G (2013) Salesforce contracting under demand censorship. Manufacturing Service Oper. Management 15(2):320–334.LinkGoogle Scholar
  • Chu LY , Sappington DEM (2009) Implementing high-powered contracts to motivate intertemporal effort supply. RAND J. Econom. 40(2):296–316.CrossrefGoogle Scholar
  • Conlon CT , Mortimer JH (2013) Demand estimation under incomplete product availability. Amer. Econom. J. Microeconomics 5(4):1–30.CrossrefGoogle Scholar
  • Crama P , Reyck BD , Degraeve Z (2008) Milestone payments or royalties? Contract design for R&D licensing. Oper. Res. 56(6):1539–1552.LinkGoogle Scholar
  • Dai T , Jerath K (2013) Salesforce compensation with inventory considerations. Management Sci. 59(11):2490–2501.LinkGoogle Scholar
  • Dai T , Jerath K (2016) Impact of inventory on quota-bonus contracts with rent sharing. Oper. Res. 64(1):94–98.LinkGoogle Scholar
  • Dai T , Jerath K (2019) Salesforce contracting under uncertain demand and supply: Double moral hazard and optimality of smooth contracts. Marketing Sci. 38(5):852–870.LinkGoogle Scholar
  • DeHoratius N , Raman A (2007) Store manager incentive design and retail performance: An exploratory investigation. Manufacturing Service Oper. Management 9(4):518–534.LinkGoogle Scholar
  • Dewatripont M , Jewitt I , Tirole J (1999) The economics of career concerns, Part II: Application to missions and accountability of government agencies. Rev. Econom. Stud. 66(1):199–217.CrossrefGoogle Scholar
  • Feiler DC , Tong JD , Larrick R (2013) Biased judgment in censored environments. Management Sci. 59(3):573–591.LinkGoogle Scholar
  • Feltham GA , Xie J (1994) Performance measure congruity and diversity in multi-task principal/agent relations. Accounting Rev. 69(3):429–453.Google Scholar
  • Grossman SJ , Hart OD (1983) An analysis of the principal-agent problem. Econometrica 51(1):7–45.CrossrefGoogle Scholar
  • Herweg F , Muller D , Weinschenk P (2010) Binary payment schemes: Moral hazard and loss aversion. Amer. Econom. Rev. 100(5):2451–2477.CrossrefGoogle Scholar
  • Ho TH , Tang CS (2004) Introduction to the special issue on marketing and operations management interfaces and coordination. Management Sci. 50(4):429–430.LinkGoogle Scholar
  • Holmstrom B (1979) Moral hazard and observability. Bell J. Econom. 10(1):74–91.CrossrefGoogle Scholar
  • Holmstrom B , Milgrom P (1991) Multitask principal-agent analyses: Incentive contracts, asset ownership, and job design. J. Law Econom. Organ. 7(Sp):24–52.Google Scholar
  • Huh WT , Levi R , Rusmevichientong P , Orlin JB (2011) Adaptive data-driven inventory control with censored demand based on Kaplan-Meier estimator. Oper. Res. 59(4):929–941.LinkGoogle Scholar
  • Innes RD (1990) Limited liability and incentive contracting with ex-ante action choices. J. Econom. Theory 52(1):45–67.CrossrefGoogle Scholar
  • Jain S (2012) Self-control and incentives: An analysis of multiperiod quota plans. Marketing Sci. 31(5):855–869.LinkGoogle Scholar
  • Jain A , Rudi N , Wang T (2015) Demand estimation and ordering under censoring: Stock-out timing is (almost) all you need. Oper. Res. 63(1):134–150.LinkGoogle Scholar
  • Jain T, Hazra J, Gavirneni S (2019) Ranking-based versus outcome-linked incentive systems: Designing an effective compensation system. Working paper, Cornell University, Ithaca, NY.Google Scholar
  • Jerath K , Kim S-H , Swinney R (2017) Product quality in a distribution channel with inventory risk. Marketing Sci. 36(5):747–761.LinkGoogle Scholar
  • Jerath K , Netessine S , Zhang ZJ (2007) Can we all get along? incentive contracts to bridge the marketing and operations divide. Working paper, Columbia University, New York.Google Scholar
  • Jewitt I (2008) Moral hazard with bounded payments. J. Econom. Theory 143(1):59–82.CrossrefGoogle Scholar
  • Ke R , Ryan CT (2018a) Monotonicity of optimal contracts without the first-order approach. Oper. Res. 66(4):1101–1118.LinkGoogle Scholar
  • Ke R, Ryan CT (2018b) A general solution method for moral hazard problems. Theoretical Econom. 13(3):1425–1481. Google Scholar
  • Krishnan H , Winter RA (2012) The economic foundations of supply chain contracting. Foundations Trends Tech. Inform. Oper. Management 5(3–4):147–309.CrossrefGoogle Scholar
  • Krishnan J , Fisher M (2005) Store Level Execution at Wawa: Case Study. Working paper, University of Pennsylvania, Philadelphia.Google Scholar
  • Lacker JM , Weinberg JA (1989) Optimal contracts under costly state falsification. J. Political Econom. 97(6):1345–1363.CrossrefGoogle Scholar
  • Laffont JJ , Martimort D (2009) The Theory of Incentives: The Principal-Agent Model (Princeton University Press, Princeton, NJ).CrossrefGoogle Scholar
  • Lal R , Srinivasan V (1993) Compensation plans for single-and multi-product salesforces: An application of the Holmstrom-Milgrom model. Management Sci. 39(7):777–793.LinkGoogle Scholar
  • Long X , Nasiry J (2020) Wage transparency and social comparison in salesforce compensation. Management Sci. , ePub ahead of print April 16, https://doi.org/10.1287/mnsc.2019.3461.LinkGoogle Scholar
  • Mirrlees JA (1999) The theory of moral hazard and unobservable behaviour: Part I. Rev. Econom. Stud. 66(1):3–21.CrossrefGoogle Scholar
  • Misra S , Pinker EJ , Shumsky RA (2004) Salesforce design with experience-based learning. IIE Trans. 36(10):941–952.CrossrefGoogle Scholar
  • Nikoofal ME , Gümüş M (2018) Quality at the source or at the end? Managing supplier quality under information asymmetry. Manufacturing Service Oper. Management 20(3):498–516.LinkGoogle Scholar
  • Oyer P (2000) A theory of sales quotas with limited liability and rent sharing. J. Labor Econom. 18(3):405–426.CrossrefGoogle Scholar
  • Raju JS , Srinivasan V (1996) Quota-based compensation plans for multiterritory heterogeneous salesforces. Management Sci. 42(10):1454–1462.LinkGoogle Scholar
  • Rogerson WP (1985) The first-order approach to principal-agent problems. Econometrica 53(6):1357–1367.CrossrefGoogle Scholar
  • Rudi N , Drake D (2014) Observation bias: The impact of demand censoring on newsvendor level and adjustment behavior. Management Sci. 60(5):1334–1345.LinkGoogle Scholar
  • Sen A , Alp O (2020) Delegation of stocking decisions under asymmetric demand information. Manufacturing Service Oper. Management , ePub ahead of print March 6, https://doi.org/10.1287/msom.2019.0810.Google Scholar
  • Sethi SP , Thompson GL (2000) Optimal Control Theory: Applications to Management Science and Economics (Springer, New York).Google Scholar
  • Shapiro BP (1977) Can marketing and manufacturing coexist? Harvard Bus. Rev. 55(5):104–114.Google Scholar
  • Ton Z , Raman A (2004) The effect of product variety and inventory levels on misplaced products at retail stores: A longitudinal study. Working paper, Harvard Business School, Boston.Google Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.