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Øystein Sigvald Daljord

PhD Program, Marketing
PhD Program Office
Graduate School of Business
Stanford University
655 Knight Way
Stanford, CA 94305
Research Interests
Quantitative marketing
Empirical dynamic pricing

Job Market Paper

Commitment, Vertical Restraints and Dynamic Pricing of Durable Goods PDF
Working Papers
Homogenous Contracts for Heterogenous Agents: Aligning Salesforce Composition and Compensation PDF
Joint with Sanjog Misra and Harikesh Nair, R&R Journal of Marketing Research. Observed contracts in the real-world are often very simple, partly reflecting the constraints faced by contracting firms in making the contracts more complex. We focus on one such rigidity, the constraints faced by firms in fine-tuning contracts to the full distribution of heterogeneity of its employees. We explore the implication of these restrictions for the provision of incentives within the firm. Our application is to salesforce compensation, in which a firm maintains a salesforce to market its products. Consistent with ubiquitous real-world business practice, we assume the firm is restricted to fully or partially set uniform commissions across its agent pool. We show this implies an interaction between the composition of agent types in the contract and the compensation policy used to motivate them, leading to a “contractual externality” in the firm and generating gains to sorting. This paper explains how this contractual externality arises, discusses a practical approach to endogenize agents and incentives at a firm in its presence, and presents an empirical application to salesforce compensation contracts at a US Fortune 500 company that explores these considerations and assesses the gains from a salesforce architecture that sorts agents into divisions to balance firm-wide incentives. Empirically, we find the restriction to homogenous plans significantly reduces the payoffs of the firm relative to a fully heterogeneous plan when it is unable to optimize the composition of its agents. However, the firm's payoffs come very close to that of the fully heterogeneous plan when it can optimize both composition and compensation. Thus, in our empirical setting, the ability to choose agents mitigates the loss in incentives from the restriction to uniform contracts. We conjecture this may hold more broadly.
Valuing Salesagents with Contractual Externalities
Joint with Sanjog Misra and Harikesh Nair. We discuss using the Shapley value as a metric to value salesagents in a heterogeneous salesforce with contractual externalities. The metric allocates to each agent his marginal contribution to the salesforce, along with the share of the externalities he generates. Computing the Shapley values for salesagents at a real world firm, we find the metric identifies a set of agents who could profitably be dropped from the optimal salesforce composition so as to adjust uniform payment clauses that minimize firm-wide contractual externalities. The distribution of Shapley values at the optimum is found to confirm to predictions from the theory. The value metric may be used to complement the human resource management of the sales organization, which in turn may help improve the efficacy of Marketing in such settings. The metric may also be useful in other situations when salespeople have spillovers on one another, say via direct peer effects, relative incentive schemes or contests.
Last Updated 17 Jul 2015