Corvinus
Corvinus

Quota bonuses as localized sales bonuses

Bakó, Barna and Kálecz-Simon, András (2015) Quota bonuses as localized sales bonuses. Working Paper. Corvinus University of Budapest Faculty of Economics.

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Abstract

Managerial bonus schemes and their effects on firm strategies and market outcomes are extensively discussed in the literature. Though quota bonuses are not uncommon in practice, they have not been analysed so far. In this article we compare quota bonuses to profit-based evaluation and sales (quantity) bonuses. In a duopoly setting with independent demand shocks we find that under certain circumstances choosing quota bonuses is a dominant strategy. This may explain the widespread use of quota bonuses in situations where incentive problems are relevant.

Item Type:Monograph (Working Paper)
Series Name:Corvinus Economics Working Papers - CEWP
Series Number / Identification Number:2016/01
Uncontrolled Keywords:strategic delegation, oligopoly, managerial incentives
JEL classification:C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
D21 - Firm Behavior: Theory
D43 - Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection
L13 - Oligopoly and Other Imperfect Markets
Subjects:Economics
Funders:MTA-BCE Lendület Stratégiai Interakciók Kutatócsoport
Projects:MTA-BCE Lendület Stratégiai Interakciók Kutatócsoport
ID Code:2180
Deposited By: Barna Bakó
Deposited On:04 Jan 2016 08:38
Last Modified:14 Jan 2016 16:29

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