IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v41y1993i4p387-402.html
   My bibliography  Save this article

Strategic Cost Allocation

Author

Listed:
  • Gal-Or, Esther

Abstract

Negative externalities or 'congestion'costs in the utilization of common resources introduce strategic considerations that tie cost allocation rules to competitiveness in external markets. The equilibrium rule for allocating common costs consists of 'profitability'and 'strategic' components. The profitability component dictates that the share of common costs imposed on a product should be inversely related to its relative profitability vis-a-vis other products. The strategic component dictates that the share of common costs should be modified to favor products sold in markets where strategic considerations are of relatively greater importance (i.e., oligopolistic vis-a-vis perfectly competitive markets). Copyright 1993 by Blackwell Publishing Ltd.

Suggested Citation

  • Gal-Or, Esther, 1993. "Strategic Cost Allocation," Journal of Industrial Economics, Wiley Blackwell, vol. 41(4), pages 387-402, December.
    • Handle: RePEc:bla:jindec:v:41:y:1993:i:4:p:387-402
    as

    Download full text from publisher

    File URL: https://links.jstor.org/sici?sici=0022-1821%28199312%2941%3A4%3C387%3ASCA%3E2.0.CO%3B2-G&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See https://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mehmet Ozbilgin & Mark Penno, 2005. "Corporate Disclosure and Operational Strategy: Financial vs. Operational Success," Management Science, INFORMS, vol. 51(6), pages 920-931, June.
    2. Pizzini, Mina J., 2006. "The relation between cost-system design, managers' evaluations of the relevance and usefulness of cost data, and financial performance: an empirical study of US hospitals," Accounting, Organizations and Society, Elsevier, vol. 31(2), pages 179-210, February.
    3. Sumit K. Majumdar, 2011. "Cross Subsidization And Telecommunications Sector Wages," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 82(1), pages 1-24, March.
    4. Robert F. Göx, 1998. "Pretiale Lenkung als Instrument der Wettbewerbsstrategie," Schmalenbach Journal of Business Research, Springer, vol. 50(3), pages 260-288, March.
    5. Lemus, Ana B. & Moreno, Diego, 2020. "Strategic incentives for keeping one set of books under the Arm’s Length Principle," Mathematical Social Sciences, Elsevier, vol. 106(C), pages 78-90.
    6. L. Colombo & P. Labrecciosa & L. Lambertini, 2005. "A Chicken Game of Intraindustry Trade," Working Papers 548, Dipartimento Scienze Economiche, Universita' di Bologna.
    7. Mark L. Burton & David L. Kaserman & John W. Mayo, 2009. "Common Costs And Cross‐Subsidies: Misestimation Versus Misallocation," Contemporary Economic Policy, Western Economic Association International, vol. 27(2), pages 193-199, April.
    8. Hermann Jahnke & Anne Chwolka, 1998. "Strategische Kostenrechnung: Eine spieltheoretische Begriffsbildung," Schmalenbach Journal of Business Research, Springer, vol. 50(7), pages 656-677, July.
    9. Davis, Rex & Tisdell, Clement A., 2001. "Alternative Specifications and Extensions of the Economic Threshold Concept and the Control of Livestock Pests," Economics, Ecology and Environment Working Papers 48381, University of Queensland, School of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:41:y:1993:i:4:p:387-402. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.