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Rational Inefficiencies

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  • Bogetoft, Peter
  • Hougaard, Jens Leth

Abstract

In this paper, we suggest that inefficiency may be an indirect, on-the-job compensation to agents in an organization. We show how to use actual production data to reveal the trade-offs between different inefficiencies (slacks). Moreover, we discuss how to use this to improve productivity analysis as well as decision making and incentive provisions in organizations.

Suggested Citation

  • Bogetoft, Peter & Hougaard, Jens Leth, 2001. "Rational Inefficiencies," Unit of Economics Working Papers 24191, Royal Veterinary and Agricultural University, Food and Resource Economic Institute.
    • Handle: RePEc:ags:rvaewp:24191
    DOI: 10.22004/ag.econ.24191
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    References listed on IDEAS

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    1. Haskel, Jonathan & Sanchis, Amparo, 1995. "Privatisation and X-Inefficiency: A Bargaining Approach," Journal of Industrial Economics, Wiley Blackwell, vol. 43(3), pages 301-321, September.
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    9. Varian, Hal R., 1990. "Goodness-of-fit in optimizing models," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 125-140.
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    11. Varian, Hal R., 1988. "Revealed preference with a subset of goods," Journal of Economic Theory, Elsevier, vol. 46(1), pages 179-185, October.
    12. Bogetoft, Peter, 1995. "Incentives and productivity measurements," International Journal of Production Economics, Elsevier, vol. 39(1-2), pages 67-77, April.
    13. Peter Bogetoft, 1994. "Incentive Efficient Production Frontiers: An Agency Perspective on DEA," Management Science, INFORMS, vol. 40(8), pages 959-968, August.
    14. Stigler, George J, 1976. "The Xistence of X-Efficiency," American Economic Review, American Economic Association, vol. 66(1), pages 213-216, March.
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