DEA and Activity Planning under Asymmetric Information
The productivity analysis literature has traditionally focused on the evaluation of past performances. In this paper, we consider the post productivity analysis problem of deciding which production plans to choose in the future given information from a productivity analysis. In particular, we demonstrate that Data Envelopment Analysis (DEA) has an important role to play in the reallocation game following a normal productivity analysis. DEA estimates reduce the information rents an agent can extract by “claiming” high costs for the least reduced or most expanded activity. We also examine how to optimally combine DEA estimates with other information in a planning context, including preference information, ex-ante cost reports and ex-post cost data. Copyright Kluwer Academic Publishers 2000
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bengt Holmstrom, 1997.
"Moral Hazard and Observability,"
Levine's Working Paper Archive
1205, David K. Levine.
- Henry Tulkens, 1993. "On FDH efficiency analysis: Some methodological issues and applications to retail banking, courts, and urban transit," Journal of Productivity Analysis, Springer, vol. 4(1), pages 183-210, June.
- Boaz Golany, 1988. "Note---A Note on Including Ordinal Relations Among Multipliers in Data Envelopment Analysis," Management Science, INFORMS, vol. 34(8), pages 1029-1033, August.
- Myerson, Roger B, 1979.
"Incentive Compatibility and the Bargaining Problem,"
Econometric Society, vol. 47(1), pages 61-73, January.
- Roger B. Myerson, 1977. "Incentive Compatability and the Bargaining Problem," Discussion Papers 284, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Bogetoft, Peter, 1995. "Incentives and productivity measurements," International Journal of Production Economics, Elsevier, vol. 39(1-2), pages 67-77, April.
- R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
- Harris Milton & Townsend, Robert M, 1981. "Resource Allocation under Asymmetric Information," Econometrica, Econometric Society, vol. 49(1), pages 33-64, January.
- Banker, Rajiv D., 1980. "A game theoretic approach to measuring efficiency," European Journal of Operational Research, Elsevier, vol. 5(4), pages 262-266, October.
- Banker, Rajiv D., 1984. "Estimating most productive scale size using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 17(1), pages 35-44, July.
- Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
- Agha Iqbal Ali & Wade D. Cook & Lawrence M. Seiford, 1991. "Strict vs. Weak Ordinal Relations for Multipliers in Data Envelopment Analysis," Management Science, INFORMS, vol. 37(6), pages 733-738, June.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
- Peter Bogetoft, 1996. "DEA on Relaxed Convexity Assumptions," Management Science, INFORMS, vol. 42(3), pages 457-465, March.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
- Laffont, Jean-Jacques, 1992.
"The New Economics of Regulation Ten Years After,"
IDEI Working Papers
22, Institut d'Économie Industrielle (IDEI), Toulouse.
- McAfee, R. Preston & McMillan, John, 1988. "Multidimensional incentive compatibility and mechanism design," Journal of Economic Theory, Elsevier, vol. 46(2), pages 335-354, December.
- John Christensen, 1981. "Communication in Agencies," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 661-674, Autumn.
- Rick Antle & Gary D. Eppen, 1985. "Capital Rationing and Organizational Slack in Capital Budgeting," Management Science, INFORMS, vol. 31(2), pages 163-174, February.
- Sappington, David, 1983. "Limited liability contracts between principal and agent," Journal of Economic Theory, Elsevier, vol. 29(1), pages 1-21, February.
- Banker, R. D. & Charnes, A. & Cooper, W. W. & Clarke, R., 1989. "Constrained game formulations and interpretations for data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 40(3), pages 299-308, June.
- Merja Halme & Tarja Joro & Pekka Korhonen & Seppo Salo & Jyrki Wallenius, 1999. "A Value Efficiency Approach to Incorporating Preference Information in Data Envelopment Analysis," Management Science, INFORMS, vol. 45(1), pages 103-115, January.
- Peter Bogetoft, 1994. "Incentive Efficient Production Frontiers: An Agency Perspective on DEA," Management Science, INFORMS, vol. 40(8), pages 959-968, August.
- Melumad, Nahum D. & Reichelstein, Stefan, 1989. "Value of communication in agencies," Journal of Economic Theory, Elsevier, vol. 47(2), pages 334-368, April.
When requesting a correction, please mention this item's handle: RePEc:kap:jproda:v:13:y:2000:i:1:p:7-48. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.