The LeChatelier principle in a DEA model

This paper aims to relate the LeChatelier principle, first introduced into economics by Samuelson (1947), with the DEA approach through two propositions. These propositions allow for bridging the principle over a DEA model with and without the presence of non-discretionary inputs and enable one to m...

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Bibliographic Details
Published in:European journal of operational research 2009-08, Vol.197 (1), p.371-373
Main Authors: Chen, Yah-Wei, Huang, Tai-Hsin
Format: Article
Language:English
Subjects:
Allocative efficiency
Applied sciences
Data envelopment analysis
Exact sciences and technology
LeChatelier principle
LeChatelier principle Quasi-fixed inputs Technical efficiency Allocative efficiency
Mathematics
Nonparametric inference
Operational research. Management science
Operations research
Probability and statistics
Production costs
Quasi-fixed inputs
Sciences and techniques of general use
Statistics
Studies
Technical efficiency
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Summary:This paper aims to relate the LeChatelier principle, first introduced into economics by Samuelson (1947), with the DEA approach through two propositions. These propositions allow for bridging the principle over a DEA model with and without the presence of non-discretionary inputs and enable one to make comparisons for the various efficiency measures under different conditions. The quasi-fixity of some inputs hinders a firm’s capacity from instantly and freely adjusting its input combination in order to minimize its production costs. The assumption that all inputs are discretionary tends to exaggerate managers’ ability to dispense resources and renders invalid information on the adjustment of the current input mix.
ISSN:0377-2217
1872-6860
DOI:10.1016/j.ejor.2008.06.020