Transfer pricing under bilateral bargaining
Article Abstract:
Many decentralized organizations use negotiation as a transfer-pricing mechanism in order to implement greater divisional autonomy and improve profit performance. Previous research has indicated that, for firms using negotiation to determine transfer prices, negotiation may not lead to the maximization of profits and may be inequitable as regards divisional performance evaluations. A study of 134 subjects using a bilateral bargaining methodology to analyze transfer pricing negotiations between buying and selling divisions with private profit information reveals that divisional incentives are not superior to mixed incentives in producing increased divisional profits. Research results reveal that company profits increased under divisional incentives and that single-period profits were lower than multiperiod profits.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1990
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The effects of financial information symmetry on conflict resolution: an experiment in the context of labor negotiations
Article Abstract:
Union negotiators typically do not enjoy the access to financial information that management does, leading to conditions of information asymmetry in collective bargaining. A laboratory experiment using 80 subjects in 40 negotiating dyads was conducted to analyze the effects that financial information disclosure has on collective bargaining under conditions of profitability and non-profitability due to its effect on information symmetry. The results of the experiment showed that settlements and post-negotiating conflicts were statistically unaffected by prior disclosure, but that union subjects' pre-negotiation expectations and conflicts were higher in cases where information was not disclosed to them in the loss scenario and that settlements were greater in the profits scenario.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1990
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A perspective on negotiation research in accounting and auditing
Article Abstract:
Negotiations are often believed to have well-defined boundaries, but many kinds of interpersonal interactions could be interpreted as negotiations. Using a definition of negotiations that includes two or more parties with different preferences jointly involved in decision making that affects both parties, accounting and auditing interactions can be viewed as a negotiation system. Accounting research on negotiation can enhance the predicative power of the rational negotiation models it uses with adjustments offered by current behavioral decision theory and research in order. A model incorporating systematic biases is better for describing actual behavior than the rational model alone.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1990
User Contributions:
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