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Tangency Capacity Notions Based upon the Profit and Cost Functions: A Non-Parametric Approach and a General Comparison

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  • Briec, Walter

    (University of Perpignan, F-66000 Perpignan, France)

  • Kerstens, Kristiaan

    () (IESEG School of Management, F-59000 Lille, France)

  • Prior, Diego

    (Universitat Aut`onoma de Barcelona, E-08193 Bellaterra, Spain)

  • Van de Woestyne, Ignace

    () (Hogeschool-Universiteit Brussel (HUB), Belgium)

Abstract

This contribution provides a way to define and compute a tangency notion of economic capacity based upon the relation between the various directional distance functions and the profit and cost functions using non-parametric technologies. A new result relating profit and cost function-based tangency capacity notions is established.

Suggested Citation

  • Briec, Walter & Kerstens, Kristiaan & Prior, Diego & Van de Woestyne, Ignace, 2010. "Tangency Capacity Notions Based upon the Profit and Cost Functions: A Non-Parametric Approach and a General Comparison," Working Papers 2010/04, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
  • Handle: RePEc:hub:wpecon:201004
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    References listed on IDEAS

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    Cited by:

    1. repec:bla:pacecr:v:22:y:2017:i:4:p:720-739 is not listed on IDEAS
    2. Bruno De Borger & Kristiaan Kerstens & Diego Prior & Ignace Van de Woestyne, 2013. "Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3529-3529, August.
    3. De Borger, Bruno & Kerstens, Kristiaan & Prior, Diego & Van de Woestyne, Ignace, 2009. "Static Efficiency Decompositions and Capacity Utilisation: Integrating Economic and Technical Capacity Notions. Technical Appendix," Working Papers 2009/31, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    4. Giovanni Cesaroni & Kristiaan Kerstens & Ignace Van de Woestyne, 2017. "A New Input-Oriented Plant Capacity Notion: Definition and Empirical Comparison," Pacific Economic Review, Wiley Blackwell, vol. 22(4), pages 720-739, October.

    More about this item

    Keywords

    economic capacity; profit function; cost function; directional distance function; tangency;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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