Management and Production Efficiency
This paper is aimed at discussing, within the framework of production microeconomics, the properties of production sets with hidden, non observable management inputs. We assume that the effect of such inputs is to enhance the productivities of factors, and may be described through a one-dimensional real variable z. We show that, under some reasonable regularity conditions for the production set that are in line with our basic assumptions onthe effect of management, z may, in general, be expressed by some functio n of the input vector x, and the ouput vecor y, which is uppersemicontinuous in x and y, nonincreasing in x, and nondecreasing in y.
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