This paper considers a firm whose potential employees have private information on both their productivity and the extent of their fairness concerns. Fairness is modelled as inequity aversion, where fair-minded workers suffer if their colleagues get more income net of production costs. Screening...

This paper considers a firm whose potential employees have private information on both their productivity and the extent of their fairness concerns. Fairness is modelled as inequity aversion, where fair-minded workers suffer if their colleagues get more income net of production costs. Screening...

Designing compensation plans with an appropriate level of incentives is a key decision faced by managers of direct sales forces. The authors use data on individual salesperson compensation contracts to show that firms design their pay plans to both discriminatingly select, (i.e., attract and...

Using contests to generate innovation has and is widely used. Such contests often involve offering a prize that depends upon the accomplishment (effort). Using an all-pay auction as a model of a contest, we determine the optimal reward for inducing innovation. In a symmetric environment, we find...

If managers bargain with workers over wage before choosing output in a Cournot duopoly, owners face two conflicting interests in designing managerial incentives: one for profit orientation to reduce wage, and the other for sales orientation to gain in output competition. The net effect depends...

Paying a fixed amount of money to participants in choice-based conjoint (CBC) studies is the industry standard. Recently, Ding (2007) has shown that a lottery incentive scheme outperformed a fixed fee incentive scheme when predicting out-of-sample choices. We achieve two research goals in the...

To generate downstream sales, manufacturers often spend both effort and compensation when working with their dealers. Existing theories are inconclusive about the interdependent role of the two kinds of instruments in motivating dealer effort; that is, whether they are substitutes or...

The paper broadens the focus of empirical research on salesforce management to include multitasking settings with multidimensional incentives, where salespeople have private information about customers. This allows us to ask novel substantive questions around multidimensional incentive design...

Word-of-mouth, referral, or viral marketing is a highly sought-after way of advertising. We undertake a field experiment that compares incentive mechanisms for encouraging social media shares to support a given cause. Our experiment takes place on a website set up to promote a fundraising drive...

This research reveals customer- and employee-firm relations to be two routes by which firms can leverage executive incentive structures to create customer and firm value. Analyses of a unique dataset with multiple archival sources show that (1) increases in the proportion of CEOs' long-term...