Time Dependence and Time Preference: Implications for Compensation Structure

Doug J. Chung

doi:10.1287/mksc.2022.0037

Time Dependence and Time Preference: Implications for Compensation Structure

2025-03-01

0

PRE

AI

DOI：10.1287/mksc.2022.0037

原文链接

原文求助

摘要

En 中文

This study jointly examines agents' time dependence-period effects within instantaneous utility-and time preference-the behavior on discounting future utility. It considers the start-and end-of-period effects for time dependence and exponential and hyperbolic discounting for time preference. The study provides formal identification arguments and sufficient conditions for both time constructs, including the duration of time dependence. Using granular individual data and variations in the compensation structure, the empirical analysis separately identifies the two time constructs. Accounting for agents' time assessment, counterfactual studies examine how changes in compensation structures affect agents' behavior and, subsequently, their sales outcomes. The findings reveal a trade-off between long-and short-quota cycles, demonstrate the nonlinearity of sales performance relative to the duration of the compensation cycle, and show how quota-bonus plans and commissions can motivate different types of agents.

Keyword:

time dependence

period effects

time preference

present bias

hyperbolic discounting

exponential discounting

compensation

dynamic structural models

identification

Time Dependence and Time Preference: Implications for Compensation Structure

摘要

期刊

机构

引用论文