The LeChatelier principle in a DEA model

Yah-Wei Chen and Tai-Hsin Huang

European Journal of Operational Research, 2009, vol. 197, issue 1, 371-373

Abstract: 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.

Keywords: LeChatelier; principle; Quasi-fixed; inputs; Technical; efficiency; Allocative; efficiency (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:197:y:2009:i:1:p:371-373

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