Business, Management and Accounting
4 years ago

Monopolies Lose Grip as Transfer Price Rule Boosts Market Competition

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SSRN Electronic Journal
Market Performance Implications of the Transfer Price Rule
Stephen Martin, Jan Vandekerckhove

Paper Summary

The transfer price rule, which ensures fair pricing within a company, can impact how markets perform. When an upstream company supplies a key ingredient to a downstream company it competes with, the rule can change how the upstream company chooses to distribute its products. This can lead to better market outcomes under certain conditions.

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