MU Yin-ping, TANG Xiao-wo, MA Yong-kai. A Cooperation Game Analysis of Transfer Pricing[J]. Journal of University of Electronic Science and Technology of China, 2005, 34(2): 277-280.
Citation: MU Yin-ping, TANG Xiao-wo, MA Yong-kai. A Cooperation Game Analysis of Transfer Pricing[J]. Journal of University of Electronic Science and Technology of China, 2005, 34(2): 277-280.

A Cooperation Game Analysis of Transfer Pricing

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  • Received Date: July 04, 2003
  • The paper aims at the unfair which the marginal cost transfer pricing method on firm's profit assignment. By inducting the thoughts of cooperation game, we put forward to divide the firm's total profit use Shapley value of cooperation game based on marginal cost transfer pricing method. The operation steps are the upstream divisions supply the intermediate products on marginal cost price firstly. Secondly, the headquarters divides the total profit with Shapley value method. At last, the headquarters assesses the performance and reward on base of the redistribution profit to the divisions' managers. The conclusion is that any division's profit of redistributed is exceed the independent profit. So implementing the marginal cost pricing strategy and redistribution the revenue, can get the internal targets coincidence and improve the total profit of the firm.
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