|
EconStor >
Eberhard Karls Universität Tübingen >
Wirtschaftswissenschaftliche Fakultät, Universität Tübingen >
Tübinger Diskussionsbeiträge, Universität Tübingen >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/22079
|
| | |
| Title: | | Transfer Pricing Based on Actual versus Standard Costs  |
| Authors: | | Lengsfeld, Stephan Schiller, Ulf |
| Issue Date: | | 2003 |
| Series/Report no.: | | Tübinger Diskussionsbeiträge 272 |
| Abstract: | | The use of information plays an important role in the choice of transfer prices (TP). We discuss the information provision of two centralized mechanisms, namely, actual-cost and standard-cost based TP. Actual cost based TP use all available cost information whereas standard cost based TP only reflect expected cost. We analyze the impact of either regime on the incentives of two divisions that make upfront investments and - later - trade an intermediate good. Actual cost based TP allow for a flexible adjustment of the trade decision to the realization of marginal costs but lead to under-investment and under-trade. Standard cost based TP provide excellent investment incentives but loose flexibility. Which of both TP regimes is superior thus depends on the amount of uncertainty, the returns on investments and the average profitability of trade |
| Subjects: | | Transfer Pricing Hold Up Problem Intrafirm Trade Incomplete Contracts |
| JEL: | | M46 D23 M40 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Tübinger Diskussionsbeiträge, Universität Tübingen
|
| Files in This Item:
| |
| File |
Description |
Size | Format |
| 272.pdf | | 2,33 MB | Adobe PDF |
|
| No. of Downloads:
| |
Counter Stats
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/22079
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|