The Behavioral Promise and Pitfalls in Compensating Store Managers
Author
Abstract
Suggested Citation
DOI: 10.1287/mnsc.2019.3458
Download full text from publisher
References listed on IDEAS
- Elena Katok & Diana Yan Wu, 2009. "Contracting in Supply Chains: A Laboratory Investigation," Management Science, INFORMS, vol. 55(12), pages 1953-1968, December.
- Paarsch, Harry J & Shearer, Bruce, 2000.
"Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records,"
International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 59-92, February.
- Paarsch, H-J & Shearer, B, 1996. "Piece Rates, Fixed Wages, and Incentive Effects : Statistical Evidence From Payroll Records," Papers 9623, Laval - Recherche en Energie.
- Paarsch, Harry J. & Shearer, Bruce, 1996. "Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records," Cahiers de recherche 9623, Université Laval - Département d'économique.
- Harry J. Paarsch & Bruce Shearer, 1996. "Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records," CIRANO Working Papers 96s-31, CIRANO.
- Paul Oyer, 1998. "Fiscal Year Ends and Nonlinear Incentive Contracts: The Effect on Business Seasonality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 149-185.
- Christopher Ferrall & Bruce Shearer, 1999. "Incentives and Transactions Costs Within the Firm: Estimating an Agency Model Using Payroll Records," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(2), pages 309-338.
- McKelvey Richard D. & Palfrey Thomas R., 1995.
"Quantal Response Equilibria for Normal Form Games,"
Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July.
- McKelvey, Richard D. & Palfrey, Thomas R., 1994. "Quantal Response Equilibria For Normal Form Games," Working Papers 883, California Institute of Technology, Division of the Humanities and Social Sciences.
- R. McKelvey & T. Palfrey, 2010. "Quantal Response Equilibria for Normal Form Games," Levine's Working Paper Archive 510, David K. Levine.
- Gary E. Bolton & Axel Ockenfels & Ulrich W. Thonemann, 2012. "Managers and Students as Newsvendors," Management Science, INFORMS, vol. 58(12), pages 2225-2233, December.
- Niederhoff, Julie A. & Kouvelis, Panos, 2016. "Generous, spiteful, or profit maximizing suppliers in the wholesale price contract: A behavioral study," European Journal of Operational Research, Elsevier, vol. 253(2), pages 372-382.
- Xiaole Wu & Julie A. Niederhoff, 2014. "Fairness in Selling to the Newsvendor," Production and Operations Management, Production and Operations Management Society, vol. 23(11), pages 2002-2022, November.
- Mirko Kremer & Stefan Minner & Luk N. Van Wassenhove, 2010. "Do Random Errors Explain Newsvendor Behavior?," Manufacturing & Service Operations Management, INFORMS, vol. 12(4), pages 673-681, July.
- Andrew M. Davis, 2015. "An Experimental Investigation of Pull Contracts in Supply Chains," Production and Operations Management, Production and Operations Management Society, vol. 24(2), pages 325-340, February.
- Heese, H. Sebastian & Swaminathan, Jayashankar M., 2010. "Inventory and sales effort management under unobservable lost sales," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1263-1268, December.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
- Holmstrom, Bengt & Milgrom, Paul, 1987.
"Aggregation and Linearity in the Provision of Intertemporal Incentives,"
Econometrica, Econometric Society, vol. 55(2), pages 303-328, March.
- Bengt Holmstrom & Paul R. Milgrom, 1985. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Cowles Foundation Discussion Papers 742, Cowles Foundation for Research in Economics, Yale University.
- Leon Yang Chu & David E.M. Sappington, 2009. "Implementing high‐powered contracts to motivate intertemporal effort supply," RAND Journal of Economics, RAND Corporation, vol. 40(2), pages 296-316, June.
- Chen, Kay-Yut & Plott, Charles R., 1998.
"Nonlinear Behavior in Sealed Bid First Price Auctions,"
Games and Economic Behavior, Elsevier, vol. 25(1), pages 34-78, October.
- Chen, Kay-Yut & Plott, Charles R., "undated". "Nonlinear Behavior in Sealed Bid First Price Auctions," Working Papers 774, California Institute of Technology, Division of the Humanities and Social Sciences.
- Christoph H. Loch & Yaozhong Wu, 2008. "Social Preferences and Supply Chain Performance: An Experimental Study," Management Science, INFORMS, vol. 54(11), pages 1835-1849, November.
- Tony Haitao Cui & Jagmohan S. Raju & Z. John Zhang, 2007. "Fairness and Channel Coordination," Management Science, INFORMS, vol. 53(8), pages 1303-1314, August.
- Sanjog Misra & Harikesh Nair, 2011.
"A structural model of sales-force compensation dynamics: Estimation and field implementation,"
Quantitative Marketing and Economics (QME), Springer, vol. 9(3), pages 211-257, September.
- Misra, Sanjog & Nair, Harikesh, 2009. "A Structural Model of Sales-Force Compensation Dynamics: Estimation and Field Implementation," Research Papers 2037, Stanford University, Graduate School of Business.
- Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
- Basak Kalkanci & Kay-Yut Chen & Feryal Erhun, 2011. "Contract Complexity and Performance Under Asymmetric Demand Information: An Experimental Evaluation," Management Science, INFORMS, vol. 57(4), pages 689-704, April.
- Bengt Holmstrom, 1979.
"Moral Hazard and Observability,"
Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 74-91, Spring.
- Bengt Holmstrom, 1997. "Moral Hazard and Observability," Levine's Working Paper Archive 1205, David K. Levine.
- Rachel Croson & Karen Donohue, 2006. "Behavioral Causes of the Bullwhip Effect and the Observed Value of Inventory Information," Management Science, INFORMS, vol. 52(3), pages 323-336, March.
- Amiya K. Basu & Rajiv Lal & V. Srinivasan & Richard Staelin, 1985. "Salesforce Compensation Plans: An Agency Theoretic Perspective," Marketing Science, INFORMS, vol. 4(4), pages 267-291.
- HOLMSTROM, Bengt, 1979. "Moral hazard and observability," LIDAM Reprints CORE 379, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Richard Mckelvey & Thomas Palfrey, 1998.
"Quantal Response Equilibria for Extensive Form Games,"
Experimental Economics, Springer;Economic Science Association, vol. 1(1), pages 9-41, June.
- McKelvey, Richard D. & Palfrey, Thomas R., 1995. "Quantal Response Equilibria for Extensive Form Games," Working Papers 947, California Institute of Technology, Division of the Humanities and Social Sciences.
- Shaoxuan Liu & Kut C. So & Fuqiang Zhang, 2010. "Effect of Supply Reliability in a Retail Setting with Joint Marketing and Inventory Decisions," Manufacturing & Service Operations Management, INFORMS, vol. 12(1), pages 19-32, March.
- Nicole DeHoratius & Ananth Raman, 2007. "Store Manager Incentive Design and Retail Performance: An Exploratory Investigation," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 518-534, April.
- Gary E. Bolton & Elena Katok, 2008. "Learning by Doing in the Newsvendor Problem: A Laboratory Investigation of the Role of Experience and Feedback," Manufacturing & Service Operations Management, INFORMS, vol. 10(3), pages 519-538, September.
- Sarah Brown & Fathi Fakhfakh & John G. Sessions, 1999. "Absenteeism and Employee Sharing: An Empirical Analysis Based on French Panel Data, 1981–1991," ILR Review, Cornell University, ILR School, vol. 52(2), pages 234-251, January.
- Teck-Hua Ho & Xuanming Su, 2009. "Peer-Induced Fairness in Games," American Economic Review, American Economic Association, vol. 99(5), pages 2022-2049, December.
- Maurice E. Schweitzer & Gérard P. Cachon, 2000. "Decision Bias in the Newsvendor Problem with a Known Demand Distribution: Experimental Evidence," Management Science, INFORMS, vol. 46(3), pages 404-420, March.
- Yunzeng Wang & Yigal Gerchak, 2001. "Supply Chain Coordination when Demand Is Shelf-Space Dependent," Manufacturing & Service Operations Management, INFORMS, vol. 3(1), pages 82-87, August.
- Teck-Hua Ho & Juanjuan Zhang, 2008. "Designing Pricing Contracts for Boundedly Rational Customers: Does the Framing of the Fixed Fee Matter?," Management Science, INFORMS, vol. 54(4), pages 686-700, April.
- Rajiv Lal & V. Srinivasan, 1993. "Compensation Plans for Single- and Multi-Product Salesforces: An Application of the Holmstrom-Milgrom Model," Management Science, INFORMS, vol. 39(7), pages 777-793, July.
- Yefen Chen & Xuanming Su & Xiaobo Zhao, 2012. "Modeling Bounded Rationality in Capacity Allocation Games with the Quantal Response Equilibrium," Management Science, INFORMS, vol. 58(10), pages 1952-1962, October.
- Leon Yang Chu & Guoming Lai, 2013. "Salesforce Contracting Under Demand Censorship," Manufacturing & Service Operations Management, INFORMS, vol. 15(2), pages 320-334, May.
- Douglas L. Kruse, 1996. "Why Do Firms Adopt Profit-Sharing and Employee Ownership Plans?," British Journal of Industrial Relations, London School of Economics, vol. 34(4), pages 515-538, December.
- Andrew M. Davis & Elena Katok & Natalia Santamaría, 2014. "Push, Pull, or Both? A Behavioral Study of How the Allocation of Inventory Risk Affects Channel Efficiency," Management Science, INFORMS, vol. 60(11), pages 2666-2683, November.
- Tinglong Dai & Kinshuk Jerath, 2013. "Salesforce Compensation with Inventory Considerations," Management Science, INFORMS, vol. 59(11), pages 2490-2501, November.
- Michael Becker-Peth & Elena Katok & Ulrich W. Thonemann, 2013. "Designing Buyback Contracts for Irrational But Predictable Newsvendors," Management Science, INFORMS, vol. 59(8), pages 1800-1816, August.
- Banker, Rajiv D. & Lee, Seok-Young & Potter, Gordon, 1996. "A field study of the impact of a performance-based incentive plan," Journal of Accounting and Economics, Elsevier, vol. 21(2), pages 195-226, April.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
Cited by:
- Legros, Benjamin, 2022. "The principal-agent problem for service rate event-dependency," European Journal of Operational Research, Elsevier, vol. 297(3), pages 949-963.
- Xiaoshuai Fan & Qingye Wu & Ying‐Ju Chen & Christopher S. Tang, 2023. "The implications of pay transparency in the presence of over‐ and underconfident agents," Production and Operations Management, Production and Operations Management Society, vol. 32(7), pages 2304-2321, July.
- Matthew J. Walker & Elena Katok & Jason Shachat, 2023.
"Trust and Trustworthiness in Procurement Contracts with Retainage,"
Management Science, INFORMS, vol. 69(6), pages 3492-3515, June.
- Matthew J. Walker & Elena Katok & Jason Shachat, 2020. "Trust and Trustworthiness in Procurement Contracts with Retainage," Working Papers 20-34, Chapman University, Economic Science Institute.
- Benjamin Legros, 2022. "The principal-agent problem for service rate event-dependency," Post-Print hal-03605421, HAL.
- Wu, Xiangxiang & Zha, Yong & Yu, Yugang, 2022. "Asymmetric retailers’ sales effort competition in the presence of a manufacturer’s help," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
- Chen, Junlin & Feng, Xiaojing & Kou, Gang & Mu, Mengting, 2023. "Multiproduct newsvendor with cross-selling and narrow-bracketing behavior using data mining methods," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).
- Wei, Lin & Chen, Menghan & Du, Shaofu & Zhang, Baofeng, 2022. "By-state fairness in selling to the newsvendor," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
- Kay-Yut Chen & Jingguo Wang & Yan Lang, 2022. "Coping with Digital Extortion: An Experimental Study of Benefit Appeals and Normative Appeals," Management Science, INFORMS, vol. 68(7), pages 5269-5286, July.
- Benjamin Legros, 2021. "Agents’ Self‐Routing for Blended Operations to Balance Inbound and Outbound Services," Production and Operations Management, Production and Operations Management Society, vol. 30(10), pages 3599-3614, October.
- Qingren He & Taiwei Shi & Botao Liu & Wanhua Qiu, 2022. "The Ordering Optimization Model for Bounded Rational Retailer with Inventory Transshipment," Mathematics, MDPI, vol. 10(7), pages 1-16, March.
- Hyun Seok (Huck) Lee & Saravanan Kesavan & Camelia Kuhnen, 2022. "When do group incentives for retail store managers work?," Production and Operations Management, Production and Operations Management Society, vol. 31(8), pages 3077-3095, August.
- Liang, Guitian & Gu, Chaocheng, 2021. "The value of target sales rebate contracts in a supply chain with downstream competition," International Journal of Production Economics, Elsevier, vol. 242(C).
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Lyudmyla Starostyuk & Kay-Yut Chen & Edmund L. Prater, 2023. "Do looks matter in supply chain contracting? An experimental study," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 58(1), pages 9-23, January.
- Becker-Peth, Michael & Thonemann, Ulrich W., 2016. "Reference points in revenue sharing contracts—How to design optimal supply chain contracts," European Journal of Operational Research, Elsevier, vol. 249(3), pages 1033-1049.
- Karen Donohue & Özalp Özer, 2020. "Behavioral Operations: Past, Present, and Future," Manufacturing & Service Operations Management, INFORMS, vol. 22(1), pages 191-202, January.
- Shan Li & Kay‐Yut Chen, 2020. "The Commitment Conundrum of Inventory Sharing," Production and Operations Management, Production and Operations Management Society, vol. 29(2), pages 353-370, February.
- Yinghao Zhang & Karen Donohue & Tony Haitao Cui, 2016. "Contract Preferences and Performance for the Loss-Averse Supplier: Buyback vs. Revenue Sharing," Management Science, INFORMS, vol. 62(6), pages 1734-1754, June.
- Doug J. Chung & Thomas Steenburgh & K. Sudhir, 2014. "Do Bonuses Enhance Sales Productivity? A Dynamic Structural Analysis of Bonus-Based Compensation Plans," Marketing Science, INFORMS, vol. 33(2), pages 165-187, March.
- Castañeda, Jaime Andrés & Gonçalves, Paulo, 2018. "Ordering behavior in a newsstand experiment," International Journal of Production Economics, Elsevier, vol. 197(C), pages 186-196.
- Özalp Özer & Yanchong Zheng & Yufei Ren, 2014. "Trust, Trustworthiness, and Information Sharing in Supply Chains Bridging China and the United States," Management Science, INFORMS, vol. 60(10), pages 2435-2460, October.
- Stewart Robinson & Stavrianna Dimitriou & Kathy Kotiadis, 2017. "Addressing the sample size problem in behavioural operational research: simulating the newsvendor problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(3), pages 253-268, March.
- Tony Haitao Cui & Guangwen Kong & Behrooz Pourghannad, 2020. "Is Simplicity the Ultimate Sophistication? The Superiority of Linear Pricing," Production and Operations Management, Production and Operations Management Society, vol. 29(7), pages 1767-1788, July.
- Arzum Akkaş & Nachiketa Sahoo, 2020. "Reducing Product Expiration by Aligning Salesforce Incentives: A Data‐driven Approach," Production and Operations Management, Production and Operations Management Society, vol. 29(8), pages 1992-2009, August.
- Abdolkarim Sadrieh & Guido Voigt, 2017. "Strategic risk in supply chain contract design," Journal of Business Economics, Springer, vol. 87(1), pages 125-153, January.
- Samuel N. Kirshner & Brent B. Moritz, 2023. "For the future and from afar: Psychological distance and inventory decision‐making," Production and Operations Management, Production and Operations Management Society, vol. 32(1), pages 170-188, January.
- Castañeda, Jaime Andrés & Brennan, Mark & Goentzel, Jarrod, 2019. "A behavioral investigation of supply chain contracts for a newsvendor problem in a developing economy," International Journal of Production Economics, Elsevier, vol. 210(C), pages 72-83.
- Hofstra, Nienke & Spiliotopoulou, Eirini, 2022. "Behavior in rationing inventory across retail channels," European Journal of Operational Research, Elsevier, vol. 299(1), pages 208-222.
- Haresh Gurnani & Karthik Ramachandran & Saibal Ray & Yusen Xia, 2014. "Ordering Behavior Under Supply Risk:An Experimental Investigation," Manufacturing & Service Operations Management, INFORMS, vol. 16(1), pages 61-75, February.
- Elahi, Ehsan & Lamba, Narasimha & Ramaswamy, Chinthana, 2013. "How can we improve the performance of supply chain contracts? An experimental study," International Journal of Production Economics, Elsevier, vol. 142(1), pages 146-157.
- Andrew M. Davis & Rihuan Huang & Douglas J. Thomas, 2022. "Retailer Inventory Sharing in Two-Tier Supply Chains: An Experimental Investigation," Management Science, INFORMS, vol. 68(12), pages 8773-8790, December.
- Ockenfels, Axel & Selten, Reinhard, 2014. "Impulse balance in the newsvendor game," Games and Economic Behavior, Elsevier, vol. 86(C), pages 237-247.
- Li, Yan & Chen, Yefen & Shou, Biying & Zhao, Xiaobo, 2019. "Oligopolistic quantity competition with bounded rationality and social comparison," International Journal of Production Economics, Elsevier, vol. 211(C), pages 180-196.
More about this item
Keywords
behavioral operations; operations and marketing interface; sales effort; compensation contract; fairness; quantal response equilibrium;All these keywords.
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:66:y:2020:i:10:p:4899-4919. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.