Capacity Rights and Full-Cost Transfer Pricing

• 成果类型: Article
• 署名作者: Dutta, Sunil; Reichelstein, Stefan
• 署名单位: University of California System; University of California Berkeley; University of Mannheim; Stanford University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3477
• 发表日期: 2021
• 关键词: Performance measurement; managerial incentives; capacity planning; full cost; transfer pricing

摘要

This paper examines the theoretical properties of full-cost transfer prices in multidivisional firms. In our model, divisional managers are responsible for the initial acquisition of productive capacity and the utilization of that capacity in subsequent periods, once operational uncertainty has been resolved. We examine alternative variants of full-cost transfer pricing with the property that the discounted sum of transfer payments is equal to the initial capacity acquisition cost and the present value of all subsequent variable costs of output supplied to a division. Our analysis identifies environments where particular variants of full-cost transfer pricing induce efficiency in both the initial investments and the subsequent output levels. Our findings highlight the need for a proper integration of intracompany pricing rules and divisional control rights over capacity assets.