A \(\mathbb B\)-convex production model for evaluating performance of firms (Q1018341): Difference between revisions

A new production model is developed similar to Data Envelopment Analysis (DEA) approach. The difference is that the convex framework of the DEA model is replaced by an order theoretical condition: if two input vectors can produce a given output then the coordinatewise maximum of these two vectors can produce that same output. In the proposed model, technologies are dually linked by a min-max cost function. It has been proven that the latter is dual to the traditional Shephard's distance function. By replacing the usual convex hull of the data set by what is called a B-convex hull, the Shephard's distance function can be explicitly calculated.