Decision-making by environmentally conscious managers is important, because many companies emphasize environmental load reduction in practice. This study explores the level of transfer prices that are settled by environmentally conscious managers in quantity competitions. While observable...

Short-run maximization of firm profits provides the sole justification for transfers at marginal cost. This conclusion is based, however, on a theory of the firm that ignores precisely those information and agency costs that make transfer pricing necessary. An alternative approach is to...