Inventory Management of a Fast-Fashion Retail Network
Operations Research
Channel Stuffing with Short-Term Interest in Market Value
Management Science
The Newsvendor Problem with Advertising Revenue
Manufacturing & Service Operations Management
When Acquisition Spoils Retention: Direct Selling vs. Delegation Under CRM
Management Science
An efficient algorithm for stochastic capacity portfolio planning problems
Journal of Intelligent Manufacturing
How to Price Discriminate When Tariff Size Matters
Marketing Science
International Journal of Knowledge Management
Salesforce Contracting Under Demand Censorship
Manufacturing & Service Operations Management
Capacity planning and performance contracting for service facilities
Decision Support Systems
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Salespeople are the eyes and ears of the firms they serve. They possess market knowledge that is critical for a wide range of decisions. A key question is how a firm can provide incentives to its salesforce so that it is in their interest to truthfully disclose their information about the market and to work hard. Many people have considered this question and provided solutions. Perhaps the most well-known solution is due to Gonik (1978), who proposed and implemented a clever scheme designed to elicit market information and encourage hard work. The purpose of this paper is to study Gonik's scheme and compare it with a menu of linear contracts--a solution often used in the agency literature--in a model where the market information possessed by the salesforce is important for the firm's production and inventory-planning decisions.