This study uses the Markov chain and agency theory to demonstrate a link between a salesperson's perceived attributes with customer retention and both optimal effort and commission, using a relational perspective. The purpose is to show sales managers that, with a customer survey, they can use...

Despite their theoretical value in tackling principal–agent problems at low cost to firms there is almost no empirical literature on the prevalence and correlates of performance bonds posted by corporate executives. We show that they are an important feature in today's CEO labour market in...

Corporate scandals, reflected in excessive management compensation and fraudulent accounts, cause great damage. Agency theory’s insistence to link the compensation of mangers and directors as closely as possible to firm performance is a major reason for these scandals. They cannot be overcome...

The paper addresses the problem of the allocation of decision rights on the shop floor. We try to solve particular limitations of Agency Theory by presenting a complementary approach based on Organization Theory and Transaction Cost Economics. Empirical evidence stems from two industries with...

This paper explores the links that the allocation of decision rights on the shop floor maintains with labor transaction attributes and several structural traits of the firm. The approach is based on the transaction cost apparatus and harnesses the theoretical and empirical background provided by...

Rank-order tournaments are usually modeled simultaneously. However, real tournaments are often sequentially. We show that agents' strategic behavior significantly differs in sequential tournaments compared to simultaneous tournaments. In a sequential tournament, under certain conditions the...

I study the design of sequential tournaments in which one agent makes his effort choice after observing the other agent's decision. In case the two agents are homogeneous and both risk-neutral, sequential tournaments are identical to simultaneous tournaments w.r. to prizes and effort...

This paper considers a two-stage game with two owners and two managers. On the first stage, the owners choose a linear combination of profits and sales as incentives for their managers. On the second stage, the two managers compete in a tournament against each other. In a symmetric equilibrium,...

The multitask principal-agent theory argues that incentive devices for the agent tend to be complementary due to the need for balanced allocation of effort among the tasks. A growing body of empirical literature appears to support this notion. However, when there can be several signals for each...