The transfer pricing problem: a mixed mechanism approach

Arieh Gavious, Yair Tauman

Research output: Working paper/PreprintWorking paper

Abstract

We consider a decentralized firm with one selling division and one buying division with asymmetric information about the cost functions of the two divisions. We show that there is a mechanism which achieves efficiency, truth-telling via dominant, individual strategies, individual rationality and achieves almost budget balancing for a large class of cost structures.
Original languageEnglish
Place of PublicationTel-Aviv
PublisherThe Israel Institute of Business Research
Number of pages21
StatePublished - 1997

Publication series

NameWorking paper (Israel Institute of business Research)
PublisherThe Israel Institute of Business Research
Volume31/97

Keywords

  • Transfer Pricing
  • Mechanism Design
  • Decentralization

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