We examine theoretical predictions and econometric evidence concerning franchise contracting and sales-force compensation and suggest a number of factors that ought to influence the contracts that are written between principles and agents. For each factor, we construct the simplest theoretical model that is capable of capturing what we feel to be its essence. The comparative statics from the theoretical exercise are then used to organize our discussion of the empirical evidence, where the evidence is taken from published studies that have attempted to assess each factor's effect on the power of agent incentives. We also discuss theoretical issues and empirical results pertaining to a few topics that have been addressed in the literature but that do not fit easily into our simple modeling framework. A surprising finding of our survey of retail contracting under exclusive marks is the robust nature of the evidence: although researchers assess different industries over different time periods using a number of proxies for a given factor, their empirical findings are usually consistent with one another.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
6544.
Length: Date of creation: May 1998 Date of revision: Publication status: published as Advances in Business Applications of Game Theory, Chatterjee, K. and W. Samuelson, eds., Kluwer Academic Press, 2000. Handle: RePEc:nbr:nberwo:6544
Note: IO Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Other versions of this item:
Find related papers by JEL classification: L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior L8 - Industrial Organization - - Industry Studies: Services
This paper has been announced in the following NEP Reports:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Avner Ben-Ner & Fanmin Kong & Stephanie Lluis, .
"Uncertainty and Organization Design,"
Working Papers
0107, Industrial Relations Center, University of Minnesota (Twin Cities Campus).
[Downloadable!]
Hendrikse, G.W.J. & Jiang, T., 2007.
"An Incomplete Contracting Model of Governance Structure Variety in Franchising,"
Research Paper
ERS-2007-049-ORG Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
[Downloadable!]