Intermediate Products Under Different Circumstances Within The Group Companies Transfer Pricing Study

Plenty of research on transfer pricing system has been carrying out on both theoretical and practical level, and a lot of important theories and solutions have been put up. As a result of quantitative studies, some useful transfer pricing methods have been used in practice. However, a lot of conclusions are developed under strict assumptions as "no external market of intermediate products" or "on perfect competitive market", which can only apply to certain enterprises with certain market structures. This thesis, which is based on the previous research results, loosened the supposing condition, proposed conclusions under the four conditions.(1)Analysis on the transfer-pricing strategy under the condition that there is a completely monopolizing external market of intermediate products. Different from the previous analysis on transfer-pricing, we use the price discrimination, by comparing the benefit brought by different pricing strategy, we get the best pricing method.(2)Analysis on the conditions that Cournot competition exists in final products market, it consists two conditions: one enterprise monopolies the intermediate products or two enterprises monopoly the intermediate products. The relation between upriver and downriver companies is the dynamic game, by using reacting function method, we can get the Nash Equilibrium when the two companies have the equivalent strength. By analyzing, we get the best pricing method.(3) Analysis on the conditions that Stackelberg competition exists in final products market. In final products market, as a result of different strength, it's a dynamic game, meanwhile, leading enterprise decides the price of intermediate products first, then two companies buy them to product final products, it's also a dynamic game. By analyzing the two models, we get the best pricing method.