We consider the compensation design problem of a firm that hires a salesperson to exert effort to increase demand. We assume both demand and supply to be uncertain, with sales being the smaller of demand and supply, and assume that if demand exceeds supply then unmet demand is unobservable...

We study the impact of limited inventory on optimal salesforce compensation contracts. We use the framework of Oyer (2000), characterized by limited liability and rent sharing with the agent. A commonly invoked assumption in the inventory management literature is that the demand distribution...

A firm hires an agent (e.g., store manager) to undertake both operational and marketing tasks. Marketing tasks boost demand, but for demand to translate into sales, operational effort is required to maintain adequate inventory. The firm designs a compensation plan to induce the agent to put...

We analyse the effect of equity-based incentives in a supply chain with a downstream firm and an upstream supplier. By using the operational decision as a signal to influence external investors’ beliefs, the downstream firm’s manager intends to maximize a convex combination of the interim...

Diagnostic errors are prevalent and can result in severe patient harm. Identifying a correct diagnosis often necessitates significant diagnostic effort. Nonetheless, most physician payment schemes are procedure-based and do not account for diagnostic effort or accuracy, due to observability...