International Transfer Pricing for Goods and Intangible Asset Licenses in a Decentralized Multinational Corporation: Review and Extensions

We review and extend the core literature on international transfer price manipulation to avoid or evade taxes. Under negotiated transfer pricing with a viable bargaining structure, including performance evaluation disconnected from the transfer price, divisions voluntarily exchange accurate information to obtain firm-wide optimality, a result not dependent on restraint from exercising internal market power. For intangible licenses, a larger optimal profit shift for a given tax rate change strengthens incentives for transfer pricing abuse. In practice, an intangible's arm's length range is viewed as a guideline, a context where incentives for abuse materialize. Transfer pricing for intangibles obliges greater tax authority scrutiny.

The Hasse-Minkowski Theorem

The Hasse-Minkowski theorem concerns the classification of quadratic forms over global fields (i.e., finite extensions of Q and rational function fields with a finite constant field). Hasse proved the theorem over the rational numbers in his Ph.D. thesis in 1921. He extended the research of his thesis to quadratic forms over all number fields in 1924. Historically, the Hasse-Minkowski theorem was the first notable application of p-adic fields that caught the attention of a wide mathematical audience. The goal of this thesis is to discuss the Hasse-Minkowski theorem over the rational numbers and over the rational function fields with a finite constant field of odd characteristic. Our treatments of quadratic forms and local fields, though, are more general than what is strictly necessary for our proofs of the Hasse-Minkowski theorem over Q and its analogue over rational function fields (of odd characteristic). Our discussion concludes with some applications of the Hasse-Minkowski theorem.

The Congressional Budget Process and the Aggregate Level of Spending

This paper analyzes whether the Congressional budget process (instituted in 1974) leads to lower aggregate spending than does the piece-meal appropriations process that preceded it. Previous theoretical analysis, using spatial models of legislator preferences, is inconclusive. This paper uses a model of interest group lobbying, where a legislature determines spending on a national public good and on subsidies to subsets of the population that belong to nationwide sector-specific interest groups. In the appropriations process, the Appropriations Committee proposes a budget, maximizing the joint welfare of voters and the interest groups, that leads to overspending on subsidies. In the budget process, a Budget Committee proposes an aggregate level of spending (the budget resolution); the Appropriations Committee then proposes a budget. If the lobby groups are not subject to a binding resource constraint, the two institutional structures lead to identical outcomes. With such a constraint, however, there is a free rider problem among the groups in lobbying the Budget Committee, as each group only obtains a small fraction of the benefits from increasing the aggregate budget. If the number of groups is sufficiently large, each takes the budget resolution as given, and lobbies only the Appropriations Committee. The main results are that aggregate spending is lower, and social welfare higher, under the budget process; however, provision of the public good is suboptimal. The paper also presents two extensions: the first endogenizes the enforcement of the budget resolution by incorporating the relevant procedural rules into the model. The second analyzes statutory budget rules that limit spending levels, but can be revised by a simple majority vote. In each case,the free rider problem prevents the groups from securing the required changes to procedural and budget rules.

Visualizing the Simulation of 3-D Underwater Sensor Networks

The majority of sensor network research deals with land-based networks, which are essentially two-dimensional, and thus the majority of simulation and animation tools also only handle such networks. Underwater sensor networks on the other hand, are essentially 3D networks because the depth at which a sensor node is located needs to be considered as well. Due to that additional dimension, specialized tools need to be used when conducting simulations for experimentation. The School of Engineering’s Underwater Sensor Network (UWSN) lab is conducting research on underwater sensor networks and requires simulation tools for 3D networks. The lab has extended NS-2, a widely used network simulator, so that it can simulate three-dimensional networks. However, NAM, a widely used network animator, currently only supports two-dimensional networks and no extensions have been implemented to give it three-dimensional capabilities. In this project, we develop a network visualization tool that functions similarly to NAM but is able to render network environments in full 3-D. It is able to take as input a NS-2 trace file (the same file taken as input by NAM), create the environment, position the sensor nodes, and animate the events of the simulation. Further, the visualization tool is easy to use, especially friendly to NAM users, as it is designed to follow the interfaces and functions similar to NAM. So far, the development has fulfilled the basic functionality. Future work includes fully functional capabilities for visualization and much improved user interfaces.