Contribution to the extant literature
| Criteria | Phillips et al. (2015) | Bhardwaj (2001) | Joseph (2001) | Mishra and Prasad (2004) | Lal (1986) | Weinberg (1975) | This study |
|---|---|---|---|---|---|---|---|
| Sales force price delegation | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Segment-level discriminatory pricing | – | – | – | – | – | – | Yes |
| Optimization of customer price | Yes | – | – | Yes | – | – | Yes |
| Optimization of agent incentive | – | Accounted for but not optimized | Accounted for but not optimized | – | Accounted for but not optimized | Accounted for but not optimized | Yes |
| Type of sales force | External | Internal | Internal | Internal | Internal | Internal | External |
| Competition | – | Yes | – | – | – | – | Yes |
| Firm’s utility/decision | – | – | Yes | Yes | Yes | Yes | Yes |
| Sales force’s utility/decision | – | – | Yes | Yes | Yes | Yes | Yes |
| Customer’s utility/decision | Yes | Yes | – | – | – | – | Yes |
| Endogeneity of price | Yes | – | – | – | – | – | Yes |
| Modeling approach | Empirical (field data) | Analytical | Analytical | Analytical | Analytical | Analytical | Empirical (field data) |
| Model type | Probit model | Game theoretic model between two competing firms | Optimization of firm profit and salesperson utility | Optimization of firm profit and salesperson utility | Optimization of firm profit and salesperson utility | Optimization of firm profit and salesperson utility | Three-stage logit model |
| Research question | How much (if any) price discretion should headquarters grant salespeople? | What is the impact of competition on the delegation decision and how does delegation impact prices and incentives? | When is it optimal to delegate pricing authority to sales force? | Can the role of asymmetric information between agents and principals be mitigated through contracting? | What are the conditions under which the sales manager may allow the salesperson to set product prices? | Under what compensation system is it appropriate for a salesman to have control over price? | What are the profit implications of analytics-driven segment-level pricing compared with sales force price delegation? |
| Criteria | This study | ||||||
|---|---|---|---|---|---|---|---|
| Sales force price delegation | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Segment-level discriminatory pricing | – | – | – | – | – | – | Yes |
| Optimization of customer price | Yes | – | – | Yes | – | – | Yes |
| Optimization of agent incentive | – | Accounted for but not optimized | Accounted for but not optimized | – | Accounted for but not optimized | Accounted for but not optimized | Yes |
| Type of sales force | External | Internal | Internal | Internal | Internal | Internal | External |
| Competition | – | Yes | – | – | – | – | Yes |
| Firm’s utility/decision | – | – | Yes | Yes | Yes | Yes | Yes |
| Sales force’s utility/decision | – | – | Yes | Yes | Yes | Yes | Yes |
| Customer’s utility/decision | Yes | Yes | – | – | – | – | Yes |
| Endogeneity of price | Yes | – | – | – | – | – | Yes |
| Modeling approach | Empirical (field data) | Analytical | Analytical | Analytical | Analytical | Analytical | Empirical (field data) |
| Model type | Probit model | Game theoretic model between two competing firms | Optimization of firm profit and salesperson utility | Optimization of firm profit and salesperson utility | Optimization of firm profit and salesperson utility | Optimization of firm profit and salesperson utility | Three-stage logit model |
| Research question | How much (if any) price discretion should headquarters grant salespeople? | What is the impact of competition on the delegation decision and how does delegation impact prices and incentives? | When is it optimal to delegate pricing authority to sales force? | Can the role of asymmetric information between agents and principals be mitigated through contracting? | What are the conditions under which the sales manager may allow the salesperson to set product prices? | Under what compensation system is it appropriate for a salesman to have control over price? | What are the profit implications of analytics-driven segment-level pricing compared with sales force price delegation? |