Management Science · 1975 · 92 citations · 4 references
BusinessBusiness EconomicsEconomicsMicroeconomicsOptimizationPricing TheoryCommission CompensationOptimal ControlOptimization In EconomicsPrice OptimizationPricing DecisionsProfit MaximizationCommission Plan OptimizationCommission PricingGross Margin CommissionsGross Margin OptimizationOptimal Control Of PricesOptimal Price SettingOptimal Pricing PoliciesProfit-based Commissions
If marginal costs are constant, salesman who are paid a commission based on gross margin and who are given control over price will set prices so as to maximize simultaneously their own income and the company's profits. The result holds even if a salesman can only make a probabilistic estimate of sales.
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Allocating Sales Force Effort with Commissions and Quotas
Otto A. Davis, John U. Farley · Management Science · 1971 · 57 citations