IDEAS home Printed from https://ideas.repec.org/a/ids/ijores/v51y2024i1p38-58.html
   My bibliography  Save this article

Arbitrage opportunity estimation: the case of the Cobb-Douglas production function

Author

Listed:
  • Sergey Anokhin
  • Maxim Bushuev
  • Elena Akerman
  • Vladislav Spitsin
  • Dmitry Anokhin

Abstract

The entrepreneurship literature has recently become aware of the phenomenal promise of efficiency evaluation techniques for gauging one of its key concepts - arbitrage opportunities. Unfortunately, the use of DEA, the dominant efficiency evaluation approach, for this purpose is limited by some of the properties of the method. In this paper we develop an alternative method that could be used to assess opportunities for imitation (arbitrage) available to entrepreneurial firms. We adapt the minimum performance inefficiency technique to the Cobb-Douglas production function, compare the new method to the dominant efficiency estimation techniques that could be used to measure arbitrage opportunity, and run a Monte-Carlo experiment to explore its applicability to alternative types of production functions typically tackled with data envelopment analysis. We show that the new method may provide more accurate results than the mainstream approaches, and demonstrate a real-life application of the technique in the publishing industry setting.

Suggested Citation

  • Sergey Anokhin & Maxim Bushuev & Elena Akerman & Vladislav Spitsin & Dmitry Anokhin, 2024. "Arbitrage opportunity estimation: the case of the Cobb-Douglas production function," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 51(1), pages 38-58.
    • Handle: RePEc:ids:ijores:v:51:y:2024:i:1:p:38-58
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=141326
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijores:v:51:y:2024:i:1:p:38-58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=170 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.