Top Down Axiomatic Modeling of Metatechnologies and Evaluating Directional Economic Efficiency

Mahmood Mehdiloo, Jafar Sadeghi () and Kristiaan Kerstens
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Mahmood Mehdiloo: Department of Mathematics and Applications, University of Mohaghegh Ardabili, Ardabil, Iran
Jafar Sadeghi: Edwards School of Business, University of Saskatchewan, Saskatoon, Canada

No 2024-EQM-03, Working Papers from IESEG School of Management

Abstract: We contrast two distinct axiomatic approaches to model metatechnologies. The traditional bottom up approach revolves around axioms characterizing group technologies. In contrast, our innovative top down approach introduces a new set of axioms that directly identify the metatechnology itself. These new axioms lead to discover new algebraic statements of two metatechnologies: in particular, one metatachnology maintaining a new within-group convexity axiom, and another one without it that is essentially nonconvex. Through these metatechnology specific axioms, we derive novel minimum extrapolation results for these two metatechnologies. We adopt a directional economic inefficiency concept as a general measurement framework and its additive decomposition into technical and allocative components. We develop single-stage linear programs for the measurement of directional economic and technical inefficiencies within these two metatechnologies. Our key results are illustrated using a numerical illustration. We manage to establish links between this new top down approach and some key findings from the existing bottom up metatechnology literature.

Keywords: Data envelopment analysis; Metatechnology; Axiomatic approach; Convexity; Directional economic efficiency (search for similar items in EconPapers)
Pages: 43
Date: 2024-05
New Economics Papers: this item is included in nep-eff
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