The paper "Supply Chain Coordination Under Channel Rebates with Sales Effort Effects" by Terry A. Taylor explores the effectiveness of channel rebates in achieving supply chain coordination, particularly when retailer sales effort influences demand. The author examines two common forms of channel rebates: linear rebates and target rebates. Linear rebates, which are paid for each unit sold, cannot achieve coordination in an implementable manner. In contrast, a properly designed target rebate, which is paid for each unit sold beyond a specified target level, can achieve coordination and a win-win outcome. The paper also finds that providing returns strengthens incentives for retailer sales effort, contrary to the common belief that accepting returns weakens these incentives. The analysis is based on a one-period model, which is consistent with the supply-chain contracting literature. The paper provides theoretical foundations and numerical examples to support its findings, demonstrating that a target rebate and returns contract can achieve both channel coordination and a win-win outcome.The paper "Supply Chain Coordination Under Channel Rebates with Sales Effort Effects" by Terry A. Taylor explores the effectiveness of channel rebates in achieving supply chain coordination, particularly when retailer sales effort influences demand. The author examines two common forms of channel rebates: linear rebates and target rebates. Linear rebates, which are paid for each unit sold, cannot achieve coordination in an implementable manner. In contrast, a properly designed target rebate, which is paid for each unit sold beyond a specified target level, can achieve coordination and a win-win outcome. The paper also finds that providing returns strengthens incentives for retailer sales effort, contrary to the common belief that accepting returns weakens these incentives. The analysis is based on a one-period model, which is consistent with the supply-chain contracting literature. The paper provides theoretical foundations and numerical examples to support its findings, demonstrating that a target rebate and returns contract can achieve both channel coordination and a win-win outcome.