A MODEL FOR DECENTRALIZED DECISION-MAKING OF MULTI-PRODUCTS MARKETING

摘要

The marketing of multi-products in a decentralized system is discussed. Three models are formulated to analyze the incentive problem under distinct conditions, which are complete information, uncertainty in revenue function with risk-averse division, and both uncertainty in revenue function and asymmetric information. The analytical solutions are got that express the bonus coefficient and the level of the division’s effort. An interval in which the headquarters will give subsidies to the division is found. Both the bonus coefficient and the level of effort are negatively related with the measure of absolute risk aversion of the division.