Technical Efficiency in Firm Games with Constant Returns to Scale and α-Returns to Scale

Walter Briec, Marc Dubois () and Stéphane Mussard
Additional contact information
Walter Briec: CRESEM - Centre de Recherche sur les Sociétés et Environnements en Méditerranées - UPVD - Université de Perpignan Via Domitia, LAMPS - LAboratoire de Modélisation Pluridisciplinaire et Simulations - UPVD - Université de Perpignan Via Domitia
Marc Dubois: GREDI - Groupe de recherche en économie et développement international [Sherbrooke] - École de gestion de l'Université de Sherbrooke - UdeS - Université de Sherbrooke

Working Papers from HAL

Abstract: Cooperation between firms can never improve the technical efficiency of any firm coalition. The directional distance function, by virtue of its additive nature, is a useful tool that outlines this impossibility. In this paper, the additive aggregation scheme of input/output vectors is generalized according to an aggregator. Accordingly, cooperation between firms may increase the technical efficiency of the firm group. This improvement is shown to be compatible with nonjoint semilattice technologies that bring out either output or input (weak) complementarity. Firm games are investigated to show that firms may merge on the basis of their inputs due to constraints imposed on outputs. Conversely, they may merge with respect to the outputs they can produce because of limitations imposed on inputs.

Keywords: Directional Distance func- tion; Returns to scale; D24; Productivity and competitiveness; Aggregation; Cooperative games; Distance functions; Technical efficiency JEL Codes: D21; Complementarity (search for similar items in EconPapers)
Date: 2019-12-03
New Economics Papers: this item is included in nep-eff and nep-gth
Note: View the original document on HAL open archive server: https://hal.science/hal-02344310v2
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://hal.science/hal-02344310v2/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-02344310

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().