Delegation and salary information disclosure strategies of customer acquisition and retention

PurposeThe purpose of this study to improve the efficiency of customer acquisition and retention through the design of salary information disclosure mechanism.Design/methodology/approachThis study develops a stylized game-theoretic model of delegating customer acquisition and retention, focusing on how firms choose delegation and wage information disclosure strategy.FindingsThe results confirm the necessity for enterprises to disclose salary information. When sales agents are risk neutral, firms should choose multi-agent (MA) delegation and disclose their wages. However, when agents are risk averse, firms may disclose the wages of acquisition agents or both agents in MA delegation, depending on the uncertainty of the retention market.Originality/valueThis paper contributes to the literature on delegation of customer acquisition and retention and demonstrates that salary disclosure can be used as a supplement to the incentive mechanism.All of the following proofs are created by authors. First, we provide proofs of the optimal solution under different strategies, including MT, MA with CAR, MA with CR and MA with CA. Then, we analyze and derive lemmas and propositions. In particular, we focus on cases where sales agents are risk-averse. In fact, we can view the risk-neutral case as a special case of risk aversion with = 0:Originality/valueThis paper contributes to the literature on delegation of customer acquisition and retention and demonstrates that salary disclosure can be used as a supplement to the incentive mechanism.All of the following proofs are created by authors. First, we provide proofs of the optimal solution under different strategies, including MT, MA with CAR, MA with CR and MA with CA. Then, we analyze and derive lemmas and propositions. In particular, we focus on cases where sales agents are risk-averse. In fact, we can view the risk-neutral case as a special case of risk aversion with = 0: