Quantitative approaches to the design of incentives in business firms are surveyed by drawing on writings from management science, finance, decision analysis, and mathematical economics. Two general incentive design situations are considered: How should incentives for the company president be...

A sufficient condition for the optimality of myopic policies is derived for a class of sequential decision problems. A necessary condition is also derived. The usefulness of the sufficient condition is illustrated in the context of a dynamic portfolio selection problem, a matched sampling...