Abstract:This paper examines the scenario in which a manufacturer sells a single product through a sales-agent. The proposed model analyzes the agent’s actions when the manufacturer adopts three kinds of incentive contracts. One of the three incentive contracts is linear contracts——fixed commission contract and the other two are piece-wise linear contracts——increased commission or decreased commission contract, floor and ceiling contract. The results show that the agent’s efforts change with the parameters in the three contracts. The manufacturer can choose the form of the contracts according to the different goals such as spreading a new product, or realizing a certain sales target.