Critics have long faulted the wide-spread practice of trade promotions as wasteful. It has been estimated that this practice adds up to $100 billion worth of inventory to the distribution system. Yet the practice continues. In this paper, we propose a price-discrimination model of trade...

In this paper, we incorporate the concept of fairness in a conventional dyadic channel to investigate how fairness may affect channel coordination. We show that when channel members are concerned about fairness, the manufacturer can use a simple wholesale price above its marginal cost to...

S-shaped incentive schemes and pay caps are fairly common in practice. This paper demonstrates the optimality of s-shaped incentive schemes and pay caps by incorporating salespeople's aversion to pay inequity into the standard agency model. Our analysis shows that salespeople's desire for pay...