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Commentary on “Dynamic Incentives in Sales Force Compensation”

Author

Listed:
  • Xiangyin Kong

    (International Institute of Finance, School of Management, University of Science and Technology of China, Anhui 230026, People’s Republic of China)

  • Qi Cheng

    (International Institute of Finance, School of Management, University of Science and Technology of China, Anhui 230026, People’s Republic of China; College of Business, City University of Hong Kong, Kowloon, Hong Kong Special Administrative Region)

  • Yimin Yu

    (College of Business, City University of Hong Kong, Kowloon, Hong Kong Special Administrative Region)

Abstract

We show that the Hamilton-Jacobi-Bellman (HJB) equation for the salesperson’s problem is not correct because of the effect of a positive discount factor for the infinite-horizon risk-sensitive control. As a result, their analyses and insights are incorrect. We present the correct HJB equation for the salesperson’s problem, which is a partial differential equation. Thus, further investigation on the correct solutions is needed to better understand the problem.

Suggested Citation

  • Xiangyin Kong & Qi Cheng & Yimin Yu, 2024. "Commentary on “Dynamic Incentives in Sales Force Compensation”," Marketing Science, INFORMS, vol. 43(1), pages 229-231, January.
    • Handle: RePEc:inm:ormksc:v:43:y:2024:i:1:p:229-231
    DOI: 10.1287/mksc.2021.0127
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    References listed on IDEAS

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    1. Olivier Rubel & Ashutosh Prasad, 2016. "Dynamic Incentives in Sales Force Compensation," Marketing Science, INFORMS, vol. 35(4), pages 676-689, July.
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