Delegation and Performance Pay: Evidence from Industrial Sales Forces
dc.contributor.author | La Fontaine, Francine | |
dc.contributor | Ghosh, Mrinal | |
dc.contributor | Lo, Desmond (Fo-Hu) | |
dc.contributor | Wouter Dessein | |
dc.date.accessioned | 2013-07-23T14:19:44Z | |
dc.date.available | 2013-07-23T14:19:44Z | |
dc.date.issued | 2015-03 | |
dc.identifier | 1190 | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/98981 | |
dc.description.abstract | Delegation is a central feature of organizational design that theory suggests should be aligned with the intensity of incentives in performance pay schemes. We explore a specific form of delegation, namely price delegation, whereby firms allow sales people to offer a maximum discount from the list price to their customers. We first develop a model of the price delegation decision based on the notions of information acquisition and constrained delegation that match the context of industrial sales. Using data on individual sales people, specifically one sales person per firm from a survey of 261 firms, we show that, consistent with predictions from our model, sales people are given more pricing authority when they are more experienced and more capable, when there is less environmental uncertainty, and to a lesser extent, when customer valuations for the product are more variable. Finally, also consistent with the predictions of our model, we show that price delegation is increasing in the intensity of incentives given to the agent. | en_US |
dc.subject | compensation | en_US |
dc.subject | incentives | en_US |
dc.subject | pricing authority | en_US |
dc.subject | evidence | en_US |
dc.subject | empirical | en_US |
dc.subject | asymmetric information | en_US |
dc.subject | agent bias | en_US |
dc.subject.classification | Business Economics | en_US |
dc.title | Delegation and Performance Pay: Evidence from Industrial Sales Forces | en_US |
dc.type | Working Paper | en_US |
dc.subject.hlbsecondlevel | Economics | en_US |
dc.subject.hlbtoplevel | Business | en_US |
dc.contributor.affiliationum | Ross School of Business | en_US |
dc.contributor.affiliationother | University of Arizona, Department of Marketing | en_US |
dc.contributor.affiliationother | Santa Clara University, Department of Marketing | en_US |
dc.contributor.affiliationother | Columbia Business School - Finance and Economics | |
dc.contributor.affiliationumcampus | Ann Arbor | |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/98981/1/1190_Ghosh.pdf | |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/98981/4/1190_LaFontaine_March2015.pdf | |
dc.description.filedescription | Description of 1190_LaFontaine_March2015.pdf : March 2015 Revision | |
dc.owningcollname | Business, Stephen M. Ross School of - Working Papers Series |
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