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A DEA methodology to evaluate the impact of information asymmetry on the efficiency of not-for-profit organizations with an application to higher education in Brazil

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  • José França
  • João Figueiredo
  • Jair Lapa

Abstract

This paper presents a conceptual framework and an analytical DEA model for evaluating the impact of information asymmetry on organizational efficiency. The framework uses concepts from agency theory to estimate the extent of moral hazard by comparing the objectives of the principal to those of the agent. The framework and model are useful in the analysis of both for-profit and not-for-profit organizations because DEA is applicable whether or not inputs and/or outputs are subject to pricing mechanisms. An illustration focusing on the Brazilian not-for-profit federal university system finds that the agency problem indeed exists for a subset of those institutions, indicating the desirability of improved incentive and control mechanisms on the part of the principal. Copyright Springer Science+Business Media, LLC 2010

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  • José França & João Figueiredo & Jair Lapa, 2010. "A DEA methodology to evaluate the impact of information asymmetry on the efficiency of not-for-profit organizations with an application to higher education in Brazil," Annals of Operations Research, Springer, vol. 173(1), pages 39-56, January.
    • Handle: RePEc:spr:annopr:v:173:y:2010:i:1:p:39-56:10.1007/s10479-009-0536-1
    DOI: 10.1007/s10479-009-0536-1
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