On the choice of weights profiles in cross-efficiency evaluations

Nuria Ramón, José Ruiz and Inmaculada Sirvent

European Journal of Operational Research, 2010, vol. 207, issue 3, 1564-1572

Abstract: In this paper, we propose a new approach to cross-efficiency evaluation that focuses on the choice of the weights profiles to be used in the calculation of the cross-efficiency scores. It has been claimed in the literature that cross-efficiency eliminates unrealistic weighting schemes in the sense that their effects are cancelled out in the summary that the cross-efficiency evaluation makes. The idea of our approach here is to try to avoid these unreasonable weights instead of expecting that their effects are cancelled out in the amalgamation of weights that is made. To do it, we extend the ideas of the multiplier bound approach to the assessment of efficiency without slacks in Ramón et al. (2010) to its use in cross-efficiency evaluations. The models used look for the profiles with the least dissimilar weights, and also guarantee non-zero weights. In particular, this approach allows the inefficient DMUs to make a choice of weights that prevent them from using unrealistic weighting schemes. We use some examples of the literature to illustrate the performance of this approach and discuss some issues of interest regarding the choice of weights in cross-efficiency evaluations.

Keywords: Cross-efficiency; evaluation; DEA; Weights (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:207:y:2010:i:3:p:1564-1572

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