Allocating common costs of multinational companies based on arm's length principle and Nash non-cooperative game

Allocating common costs among the subsidiaries of multinational companies (MNCs) is widely conducted in practice. It is of paramount importance that optimal allocation plans can be developed. In this study, we propose an allocation method based on the arm's length principle (ALP), which is well accepted for the internal transactions between MNCs and subsidiaries. Unlike the available studies addressing efficiencies, this study considers profits...