On the Characterization of Efficient Production Vectors

Jean-Marc Bonnisseau and Bertrand Crettez ()
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Bertrand Crettez: LIBRE - Laboratoire interdisciplinaire bisontin de recherches économiques - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]

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Abstract: In this paper we study the efficient points of a closed production set with free disposal. We first provide a condition on the boundary of the production set, which is equivalent to the fact that all boundary points are efficient. When the production set is convex, we also give an alternative characterization of efficiency around a given production vector in terms of the profit maximization rule. In the non-convex case, this condition expressed with the marginal pricing rule is sufficient for efficiency. Then we study the Luenberger's shortage function. We first provide basic properties on it. Then, we prove that the above necessary condition at a production vector implies that the shortage function is locally Lipschitz continuous and the efficient points in a neighborhood are the zeros of it and conversely.

Keywords: Production efficiency; Shortage function (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (5)

Published in Economic Theory, 2007, 31 (2), pp.213-223. ⟨10.1007/s00199-006-0096-4⟩

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Related works:
Journal Article: On the Characterization of Efficient Production Vectors (2007)
Working Paper: On the Characterization of Efficient Production Vectors (2007)
Working Paper: On the Characterization of Efficient Production Vectors (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00265699

DOI: 10.1007/s00199-006-0096-4

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