An Optimal Commission Plan for Salesmen's Control Over Price

Charles B. Weinberg

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Supply Chain and Inventory Management Merger and Competition Analysis Consumer Market Behavior and Pricing

Abstract

If marginal costs are constant, salesman who are paid a commission based on gross margin and who are given control over price will set prices so as to maximize simultaneously their own income and the company's profits. The result holds even if a salesman can only make a probabilistic estimate of sales.

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1976An Optimal Plan for Salesmen’s Compensation

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2001Delegating Pricing Decisions 1989Salesforce Compensation: Theory and Managerial Implications 2004Centralized Pricing Versus Delegating Pricing to the Salesforce Under Information Asymmetry 2015The Effectiveness of Field Price Discretion: Empirical Evidence from Auto Lending 2000Sales-Force Incentives and Inventory Management 2005Salesforce Compensation: An Analytical and Empirical Examination of the Agency Theoretic Approach 2005Delegating Pricing Decisions in Competitive Markets with Symmetric and Asymmetric Information 1990The Accuracy of Salespersons' Perceptions of their Customers: Conceptual Examination and an Empirical Study

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