Investigations of sales representatives’ valuation of options

The present research leverages the “irrational options” theoretical framework to explore options rationality differences between salespeople and non-salespeople. Specifically, the reported research first examines (Study 1) whether or not salespeople are more likely to place a higher value on diminishing options than individuals who do not work in sales. Two follow-up studies embed a potential internal moderator (salesperson thinking style; Study 2) and a potential external moderator (performance-based incentives; Study 3) of salesperson valuations of diminishing options. The method employed in all three studies is an experimental design tailored after Shin and Ariely’s (Management Science 50(5):575-586, 2004 ) seminal work on irrationality and options availability. The results demonstrate that, compared to non-salespeople, salespeople are more inclined to value option availability (Study 1), with this effect being especially pronounced for rule-bound thinkers (Study 2) and those operating under incentive-based compensation plans (Study 3). The article concludes by highlighting key managerial and theoretical implications, while acknowledging limitations and proposing directions for related, future work.