Quotation Löffler, Clemens. 2018. Transfer Prices for Coordination Under Decentralized Decision Making. In: Game Theory in Management Accounting, Hrsg. Mueller, David, Trost, Ralf, 71-89. Cham, Switzerland: Springer International Publishing.




This paper provides an overview of selected transfer pricing systems that are applied to achieve coordination within a decentralized firm. Specifically, we highlight the specific properties of transfer pricing systems when an intermediate product is sold internally via the transfer price but concurrently also sold on an external market. We adopt an incomplete contracting framework with asymmetric information at the trading stage. In this stylized model, transfer pricing guides intra-company trade and provides incentives for value-enhancing specific investments. Dependent on the distribution of information within the firm, we illustrate how these transfer pricing schemes are able to achieve coordination.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Chapter in edited volume
Language English
Title Transfer Prices for Coordination Under Decentralized Decision Making
Title of whole publication Game Theory in Management Accounting
Editor Mueller, David, Trost, Ralf
Page from 71
Page to 89
Location Cham, Switzerland
Publisher Springer International Publishing
Year 2018
URL https://link.springer.com/chapter/10.1007%2F978-3-319-61603-2_4
ISBN 978-3-319-61603-2


Löffler, Clemens (Former researcher)
Institute for Corporate Governance IN (Details)
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