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Technical efficiency in firm games with constant returns to scale and $$\alpha $$ α -returns to scale

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Listed:
  • Walter Briec

    (Université de Perpignan)

  • Marc Dubois

    (Université de Nîmes and CUFR de Mayotte)

  • Stéphane Mussard

    (Univ. Nîmes, Rue du Dr Georges Salan)

Abstract

Under a technology based on the generalized mean of inputs and outputs with constant returns to scale (CRS), the firms have incentive to merge (in a firm game) in order to improve their technical efficiency. A directional complementarity property in inputs and in outputs is introduced. It is shown that the core of the firm game is non-void whenever the aggregate technology of each coalition exhibits complementarity in outputs and CRS. In the case of $$\alpha $$ α -returns to scale, the firms have incentive to merge (improvement of technical efficiency) when there are both directional complementarity in inputs and in outputs.

Suggested Citation

  • Walter Briec & Marc Dubois & Stéphane Mussard, 2021. "Technical efficiency in firm games with constant returns to scale and $$\alpha $$ α -returns to scale," Annals of Operations Research, Springer, vol. 304(1), pages 35-62, September.
    • Handle: RePEc:spr:annopr:v:304:y:2021:i:1:d:10.1007_s10479-021-04056-6
    DOI: 10.1007/s10479-021-04056-6
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    1. Tsionas, Mike & Parmeter, Christopher F. & Zelenyuk, Valentin, 2023. "Bayesian Artificial Neural Networks for frontier efficiency analysis," Journal of Econometrics, Elsevier, vol. 236(2).

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