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Restricting the relative weights in data envelopment analysis

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  • Hosein Arman
  • Abdollah Hadi‐Vencheh

Abstract

In this paper, we address the problem of relative weight restriction in data envelopment analysis (DEA). A fuzzy‐based approach to restricting the relative weights is proposed in this study. Unlike the classical weight restriction methods, the proposed approach has an interactive orientation. That is, similar to analytical hierarchy process, the proposed method shares the decision maker (DM) in weight restriction process. Here, the preferences of DM are asked via pairwise comparison matrices. Then, the weights of factors (inputs/outputs) are extracted from these matrices. These weights, finally, are incorporated in multiplier DEA models as the parametric triangular fuzzy numbers, in which, the parameter value indicates the degree of conformity of the relative weights according to DM views. To best of our knowledge, no one has been yet utilized fuzzy set theory to control the relative weights in DEA. Putting in another word, the contribution of this study is that the authors propose a new approach based on fuzzy set theory to weight restriction in DEA. A last, a real case on financial banking efficiency is used to illustrate the proposed approach.

Suggested Citation

  • Hosein Arman & Abdollah Hadi‐Vencheh, 2021. "Restricting the relative weights in data envelopment analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4127-4136, July.
    • Handle: RePEc:wly:ijfiec:v:26:y:2021:i:3:p:4127-4136
    DOI: 10.1002/ijfe.2007
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