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A new source of inefficiency due to the inappropriate choice of price in data envelopment analysis
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R. Fallahnejad   , E. Rezaei Hezaveh |
| Department of Mathematics, Khorramabad Branch, Islamic Azad University, Khorramabad, Iran |
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Abstract: (1199 Views) |
Data envelopment analysis (DEA) is a useful tool for identifying well-performing (efficient) decision-making units (DMUs). In DEA, those units that are not placed on the efficiency frontier are considered to be inefficient units. Identifying inefficiency sources can help turn the units into more efficient ones. Therefore, studying inefficiencies is of utmost importance. The present paper aims to propose a cost production possibility set in a non-competitive environment (where prices can vary from one DMU to another). We compare the three PPSs so that we can introduce a new inefficiency source for DMUs based on the inappropriate choice of price by evaluating DMUs and comparing them with the existing cost production-possibility set frontier. And as a result, optimizing these price vectors can remove or, at least, reduce inefficiencies and create more efficient units.
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| Keywords: Data Envelopment Analysis, Price Efficiency, Inefficiency, Non-Competitive Environment, Unequal Prices. |
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Full-Text [PDF 585 kb]
(924 Downloads)
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Type of Study: Research |
Subject:
General
Received: 2021/07/17 | Accepted: 2023/01/20 | Published: 2023/01/20
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