Cost Allocation, Regulation and Incentives in Joint Production of Goods
In: Moscow University Economics Bulletin, Band 2015, Heft 1, S. 18-40
This article addresses the joint cost allocation problem in context of firm's price policy, market structure, enforcement of tax, environmental and antitrust legislation and the correlating problem of incentives' design. The paper presents the theoretical foundations to distinguish such concepts as joint and by-product, their correlation with the category of waste. Moreover, the authors provide a comparative analysis of different methods of joint cost allocations and their areas of applicability. The practical part of this work involves the overview of actual practices of cost allocation in chemical industry. It confirms the need for an adjusted approach assessment of the efficiency and legitimacy of joint production in each particular case.