Negotiating transfer pricing using the Nash bargaining solution

Clempner, J. B.; Poznyak, A. S.

doi:10.1515/amcs-2017-0060

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Tytuł artykułu

Negotiating transfer pricing using the Nash bargaining solution

Autorzy

Clempner J. B. , Poznyak A. S.

Treść / Zawartość

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15_clempner_poznyak_negotiating_transfer_pricing_2017_4.pdf

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Identyfikatory

DOI

10.1515/amcs-2017-0060

Warianty tytułu

Języki publikacji

Abstrakty

This paper analyzes and proposes a solution to the transfer pricing problem from the point of view of the Nash bargaining game theory approach. We consider a firm consisting of several divisions with sequential transfers, in which central management provides a transfer price decision that enables maximization of operating profits. Price transferring between divisions is negotiable throughout the bargaining approach. Initially, we consider a disagreement point (status quo) between the divisions of the firm, which plays the role of a deterrent. We propose a framework and a method based on the Nash equilibrium approach for computing the disagreement point. Then, we introduce a bargaining solution, which is a single-valued function that selects an outcome from the feasible pay-offs for each bargaining problem that is a result of cooperation of the divisions of the firm involved in the transfer pricing problem. The agreement reached by the divisions in the game is the most preferred alternative within the set of feasible outcomes, which produces a profit-maximizing allocation of the transfer price between divisions. For computing the bargaining solution, we propose an optimization method. An example illustrating the usefulness of the method is presented.

Słowa kluczowe

negotiated transfer pricing Nash bargaining tax avoidance corporate taxation

zagadnienie przetargowe Nasha unikanie podatku opodatkowanie przedsiębiorstw

Wydawca

Oficyna Wydawnicza Uniwersytetu Zielonogórskiego

Czasopismo

International Journal of Applied Mathematics and Computer Science

Rocznik

2017

Tom

Vol. 27, no. 4

Strony

853--864

Opis fizyczny

Bibliogr. 53 poz., rys., wykr.

Twórcy

autor

Clempner J. B.

julio@clempner.name

School of Physics and Mathematics, National Polytechnic Institute, Luis Enrique Erro S/N, San Pedro Zacatenco, Del. Gustavo A. Madero, 07738 Mexico City, Mexico

autor

Poznyak A. S.

apoznyak@ctrl.cinvestav.mx

Department of Control Automatics, Center for Research and Advanced Studies, Av. IPN 2508, Col. San Pedro Zacatenco, 07360 Mexico City, Mexico

Bibliografia

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Uwagi

Opracowanie ze środków MNiSW w ramach umowy 812/P-DUN/2016 na działalność upowszechniającą naukę (zadania 2017).

Typ dokumentu

Bibliografia

Identyfikator YADDA

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