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Efficient firm groups: Allocative efficiency in cooperative games

Author

Listed:
  • Walter Briec

    (LAMPS - LAboratoire de Modélisation Pluridisciplinaire et Simulations - UPVD - Université de Perpignan Via Domitia)

  • Stéphane Mussard

    (CHROME - Détection, évaluation, gestion des risques CHROniques et éMErgents (CHROME) / Université de Nîmes - UNIMES - Université de Nîmes)

Abstract

The concept of efficiency in groups postulates that a coalition of firms has to record a smaller distance toward the aggregate technology frontier compared with the sum of individual distances. Efficiency analysis (either allocative or technical) is defined with respect to cooperative firm game in order to provide operational distance functions, the so-called pseudo-distance functions. These pseudo-distances belong to the core interior of the allocative firm game, in other terms, any given firm coalition may always improve its allocative efficiency. We prove that such a result is impossible for technical efficiency, i.e., the technical efficiency cannot increase for all possible coalitions.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Walter Briec & Stéphane Mussard, 2014. "Efficient firm groups: Allocative efficiency in cooperative games," Post-Print hal-02132094, HAL.
    • Handle: RePEc:hal:journl:hal-02132094
    DOI: 10.1016/j.ejor.2014.04.049
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    Cited by:

    1. Walter Briec & Marc Dubois & Stéphane Mussard, 2019. "Technical Efficiency in Firm Games with Constant Returns to Scale and α-Returns to Scale," Working Papers hal-02344310, HAL.
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    3. Mussard, Stéphane & Pi Alperin, María Noel, 2021. "Accounting for risk factors on health outcomes: The case of Luxembourg," European Journal of Operational Research, Elsevier, vol. 291(3), pages 1180-1197.
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