Delegating Pricing Authority to Sales Agents: The Impact of Kickbacks

2020 ◽  
Vol 66 (6) ◽  
pp. 2686-2705
Author(s):  
Matthias Kräkel ◽  
Anja Schöttner
Keyword(s):  
Moral Hazard ◽  
Incentive Pay ◽  
Moral Hazard Problem ◽  
Sales Agent ◽  
Sales Agents ◽  
The Impact

We investigate a situation where a firm employing a sales agent faces moral hazard with respect to prospecting effort and the threat of collusion between agent and customer. We show that the firm should offer more pricing authority to the agent the more severe the moral hazard problem, although doing so further expands the agent’s discretion. Nevertheless, restricting the agent’s pricing authority such that he cannot sell to low-valuation customers is typically optimal to prevent collusion. We derive optimal collusion-proof contracts, describe conditions under which collusion arises in equilibrium, and study the optimal interaction between delegation, incentive pay, and the firm’s installed auditing technology. This paper was accepted by Juanjuan Zhang, marketing.

scholarly journals Analysis of moral hazard in Engineering agent construction system

2020 ◽  
Vol 3 (1) ◽  
pp. 22
Author(s):  
Lihua Wang ◽  
Shuguang Zhou ◽  
Yuetong Hui
Keyword(s):  
Moral Hazard ◽  
The Impact ◽  
Construction System

Analyze the moral hazard issues in the construction agency system, and enumerate the performance of moral hazard. Deeply analyze the causes, start with strengthening supervision and perfecting incentive measures, eliminate the impact of moral hazard, and give play to the advantages of agent construction.

scholarly journals Village Level Analysis of Credit and Livelihood Enhancement of Microfinance in Andhra Pradesh

2014 ◽  
Vol 10 (1) ◽  
pp. 37-60
Author(s):  
Jaya Priyadarshini Yarikipati ◽  
Srinivasa Rao Pinamala
Keyword(s):  
Moral Hazard ◽  
Adverse Selection ◽  
Andhra Pradesh ◽  
Rural Poverty ◽  
Secondary Data ◽  
Vulnerable Groups ◽  
Primary Data ◽  
Rural Credit ◽  
Positive Effects ◽  
The Impact

Micro finance as an institution are seen to have characteristics that help to solve the problems of moral hazard and adverse selection, which are the existing problems of rural credit institutions which other institutions failed to do. Group lending, peer monitoring and joint liability systems solve the adverse selection and moral hazard issues associated with rural credit markets. This study also focused in finding out the impact of micro finance programme on poverty, money lenders, women empowerment and living standards of the rural poor based on the primary and secondary data collected from Kamavarapukota mandal in Andhra Pradesh in India. Using primary data collected from the filled survey through the constructive schedules and personal interview to estimates the linkages between microfinance and its impacts on rural credit facilities, dependency ratio of money lenders for their credit needs, reduction of rural poverty, and empowerment of women in socio-economic activities.  The conclusion of this study, clearly states that the introducing microfinance inducing the overall improvements of their credit facilities as well as augmentations of their livelihood facilities in different sections of the society.  Further positive effects of this programme is that to  reinforcements of vulnerable groups or targeted population Particularly, SCs, STS, OBCs and other weaker section of the society directly to empower and to participate  in social, economic,  and political activities

Modelling the public moral hazard problem of international remittance inflows in Bangladesh

2021 ◽  
Vol 13 (2) ◽  
pp. 166
Author(s):  
Muntasir Murshed ◽  
Syed Rashid Ali ◽  
Mohammad Haseeb ◽  
Solomon Prince Nathaniel
Keyword(s):  
Moral Hazard ◽  
The Public ◽  
Moral Hazard Problem

The Impact of Technological Change on Incentive Provision

2009 ◽  
pp. 5-36
Author(s):  
Maurizio Lisciandra
Keyword(s):  
Technological Change ◽  
New Technology ◽  
Agency Problem ◽  
Optimal Solution ◽  
Jel Classification ◽  
High Rate ◽  
Incentive Pay ◽  
Iron And Steel ◽  
Piece Rate ◽  
The Impact

- The simple trade-off between incentive and risk, which is crucial to the agency problem, is not a sufficient explanation for the ineffectiveness of a specific output-related pay such as the contract system adopted in the US iron and steel industry during the second half of the nineteenth-century. The high rate of technological innovation along with workers' extensive bargaining power made output-related pay a sub-optimal solution. This stylised fact unveils the conflicting nature of piece-rate pay compared to fixed pay as new technology is introduced and stimulates an analysis of the interaction between technological change, bargaining powers, and payment systems which can be conducive to a better understanding of the agency problem and the use of incentive pay. Key words: Incentive Contracts, Inside Contracting, Unions, Technological Change. JEL Classification: J33, J51, N31, O33

Perverting Activism

2011 ◽  
Vol 2 (2) ◽  
pp. 14-29 ◽  
Author(s):  
Tommaso Bertolotti ◽  
Emanuele Bardone ◽  
Lorenzo Magnani
Keyword(s):  
Moral Hazard ◽  
New Technologies ◽  
Political Accountability ◽  
Democratic Institutions ◽  
Political Dynamics ◽  
The Impact

This paper analyzes the impact of new technologies on a range of practices related to activism. The first section shows how the functioning of democratic institutions can be impaired by scarce political accountability connected with the emergence of moral hazard; the second section displays how cyberactivism can improve the transparency of political dynamics; in the last section the authors turn specifically to cyberactivism and isolate its flaws and some of the most pernicious and self-defeating effects.

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