DEA production games

•Owen’s linear production game is extended to non-parametric production technology.•Several organizations, possibly with different technologies, may cooperate.•Resources can be pooled and their production technologies shared.•Cooperation increases the total revenue that can be obtained.•Cooperative...

Full description

Saved in:
Bibliographic Details
Published in:European journal of operational research 2013-12, Vol.231 (2), p.405-413
Main Author: Lozano, S.
Format: Article
Language:English
Subjects:
Balancing
Cooperation
Cooperative games
Data Envelopment Analysis
Game theory
Games
Information technology
Linear production games
Linear programming
Manufacturing
Mathematical models
Merging
Operational research
Optimization
Organizations
Resource pooling
Studies
Technology sharing
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:•Owen’s linear production game is extended to non-parametric production technology.•Several organizations, possibly with different technologies, may cooperate.•Resources can be pooled and their production technologies shared.•Cooperation increases the total revenue that can be obtained.•Cooperative game theory is proposed for allocating this revenue surplus. In this paper, linear production games are extended so that instead of assuming a linear production technology with fixed technological coefficients, the more general, non-parametric, DEA production technology is considered. Different organizations are assumed to possess their own technology and the cooperative game arises from the possibility of pooling their available inputs, collectively processing them and sharing the revenues. Two possibilities are considered: using a joint production technology that results from merging their respective technologies or each cooperating organization keeping its own technology. This gives rise to two different DEA production games, both of which are totally balanced and have a non-empty core. A simple way of computing a stable solution, using the optimal dual solution for the grand coalition, is presented. The full cooperation scenario clearly produces more benefits for the organizations involved although the implied technology sharing is not always possible. Examples of applications of the proposed approach are given.
ISSN:0377-2217
1872-6860
DOI:10.1016/j.ejor.2013.06.004