tailieunhanh - Tradeoffs between specific investment and optimal resource allocation: a comparison of different transfer pricing policies

This paper uses a principal-agent framework to analyze the tension between incentives for specific investment by the agent, and resource allocation that is optimal from the principal’s perspective. The analysis considers a decentralized firm in which central management can institute different transfer pricing policies to motivate divisional managers to undertake investment and production decisions. | Tradeoffs between specific investment and optimal resource allocation: a comparison of different transfer pricing policies

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