Yeom, Sungsoo; Balachandran, Kashi R; Ronen, Joshua - In: Review of Quantitative Finance and Accounting 14 (2000) 2, pp. 161-92
This paper explores the role of transfer prices as coordinating mechanisms within a firm. Three cases (full information; pure adverse selection; adverse selection and moral hazard) are analyzed and compared to show how quantity and effort are affected as assumptions on observability are...