Options as an alternative to cost sharing

Journal
Christensen, L.; Wright, D.R.
International Transfer Pricing Journal 2003 (Volume 10), No. 1
PriceUSD 45

This article deals with a recent innovation, which involves the use of real options pricing models as an alternative to a more traditional cost-sharing arrangement. This approach has been used between unrelated parties in the biotech and the pharmaceutical . The authors briefly describe the approach, show its pros and cons, and add an analysis of the US transfer pricing consequences.