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Quota Bonuses as Localized Sales Bonuses
Author(s) -
Bakó Barna,
KáleczSimon András
Publication year - 2017
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2837
Subject(s) - duopoly , incentive , economics , microeconomics , profit (economics) , compensation (psychology) , strategic interaction , cournot competition , psychology , psychoanalysis
In this article, we compare quota bonuses to profit‐based evaluation and sales (quantity) bonuses in a duopoly setting with independent demand shocks. Contrary to the previous findings, we find that under certain circumstances, either quota bonuses or sales bonuses may be optimal compensation plans. This may explain the coexistence of different bonus schemes in situations where the strategic aspect of the incentive problems is relevant. Copyright © 2017 John Wiley & Sons, Ltd.