TY - JOUR
T1 - Transfer pricing in a multidivisional firm : a cooperative game analysis
AU - LENG, Mingming
AU - PARLAR, Mahmut
PY - 2012/9/1
Y1 - 2012/9/1
N2 - We consider the transfer pricing decision for a multidivisional firm with an upstream division and multiple downstream divisions. The downstream divisions can independently determine their retail prices, and decide on whether or not they will purchase from the upstream division at negotiated transfer prices. To allocate the firm-wide profit between upstream and downstream divisions, we construct a cooperative game, show the convexity of the game, and then compute the Shapley value-based transfer prices for the firm.
AB - We consider the transfer pricing decision for a multidivisional firm with an upstream division and multiple downstream divisions. The downstream divisions can independently determine their retail prices, and decide on whether or not they will purchase from the upstream division at negotiated transfer prices. To allocate the firm-wide profit between upstream and downstream divisions, we construct a cooperative game, show the convexity of the game, and then compute the Shapley value-based transfer prices for the firm.
KW - Transfer price; Cooperative game theory; The core; Shapley value
UR - http://commons.ln.edu.hk/sw_master/1611
UR - http://www.scopus.com/inward/record.url?scp=84864423537&partnerID=8YFLogxK
U2 - 10.1016/j.orl.2012.04.009
DO - 10.1016/j.orl.2012.04.009
M3 - Journal Article (refereed)
SN - 0167-6377
VL - 40
SP - 364
EP - 369
JO - Operations Research Letters
JF - Operations Research Letters
IS - 5
ER -