A complex adaptive systems approach for productive efficiency analysis: building blocks and associative inferences

Francis L. Dougherty (), Nathaniel P. Ambler () and Konstantinos P. Triantis ()
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Francis L. Dougherty: Virginia Polytechnic Institute and State University
Nathaniel P. Ambler: Virginia Polytechnic Institute and State University
Konstantinos P. Triantis: Virginia Polytechnic Institute and State University

Annals of Operations Research, 2017, vol. 250, issue 1, No 5, 45-63

Abstract: Abstract Linkages between complex adaptive systems (CAS) thinking and efficiency analysis are in their infancy. This paper associates the basic building blocks of the CAS “flocking” metaphor with the essential building blocks of the data envelopment analysis (DEA) form of productive efficiency analysis. The linkage between these paradigms is made within an agent-based modeling framework we have named the complex adaptive productive efficiency model. Within this framework DEA “decision-making units” (DMUs) representing business units within a management system, are modeled as agents and are therefore known as agent DMU’s (ADMUs). Guided by the three fundamental rules inherent in the flocking metaphor, ADMUs “align” with other ADMUs to achieve mutual protection and reduce risks. They “cohere” with the most efficient ADMUs among them to achieve the greatest possible efficiency in the least possible time. And they “separate” themselves for one another just enough to maintain diversity of operations and avoid unnecessary competition among business units of the management system. Analysis of the resulting patterns of ADMU behavior over time enable policy insights measured against benchmarks of productive efficiency that are both intuitive and evidence-based.

Keywords: Agent-based modeling; Complex adaptive systems; Data envelopment analysis; Flocking (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s10479-016-2134-3

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