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Cost and Production Duality: The Case of the Regulated Firm

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  • Pierre Ouellette
  • Stéphane Vigeant

Abstract

This paper examines a generalization of cost-production duality for regulated firms. It derives an equivalency between the production function and conditional factor demands for the case where the firm's optimization problem is subject to a set of additional (regulatory) constraints. This procedure is extended to an optimization problem within a dynamic framework which leads to the recovery of the firm's technology. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • Pierre Ouellette & Stéphane Vigeant, 2001. "Cost and Production Duality: The Case of the Regulated Firm," Journal of Productivity Analysis, Springer, vol. 16(3), pages 203-224, November.
    • Handle: RePEc:kap:jproda:v:16:y:2001:i:3:p:203-224
    DOI: 10.1023/A:1012597904904
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    References listed on IDEAS

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    1. Pierre Ouellette & Stéphane Vigeant, 2003. "Technological choices and regulation: the case of the Canadian manufacturing sectors," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(1), pages 88-125, March.
    2. Ouellette, Pierre & Petit, Patrick & Vigeant, Stéphane, 2005. "Investment and regulation: the case of Canadian air carriers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(2), pages 93-113, March.
    3. Pierre Ouellette & Stéphane Vigeant, 2001. "On the existence of a regulated production function," Journal of Economics, Springer, vol. 73(2), pages 193-200, June.
    4. Fare, Rolf & Logan, James, 1993. "Duality Theory and Value Constraint," Scottish Journal of Political Economy, Scottish Economic Society, vol. 40(3), pages 330-334, August.
    5. Pierre Lasserre & Pierre Ouellette, 1994. "Factor Demands, Cost Functions, and Technology Measurements for Regulated Firms," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 218-242, February.
    6. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
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    1. Pierre Ouellette & Stéphane Vigeant, 2003. "Technological choices and regulation: the case of the Canadian manufacturing sectors," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(1), pages 88-125, March.
    2. Pierre Ouellette & Stéphane Vigeant, 2000. "A General Procedure to Recover the Marginal Products of a Cost Minimizing Firm," Journal of Productivity Analysis, Springer, vol. 14(2), pages 143-162, September.
    3. Pierre Ouellette & Stéphane Vigeant, 2001. "On the existence of a regulated production function," Journal of Economics, Springer, vol. 73(2), pages 193-200, June.
    4. Silva, Elvira & Lansink, Alfons Oude & Stefanou, Spiro E., 2015. "The adjustment-cost model of the firm: Duality and productive efficiency," International Journal of Production Economics, Elsevier, vol. 168(C), pages 245-256.
    5. Elvira Silva & Alfons Oude Lansink, 2013. "Dynamic Efficiency Measurement: A Directional Distance Function Approach," CEF.UP Working Papers 1307, Universidade do Porto, Faculdade de Economia do Porto.

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    Keywords

    cost; duality; regulation; firm; dynamic;
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