Abstract
This paper proposes a new methodology for evaluating the market imperfection and the bargaining power of each agent acting on a given market. The new methodology is an extension of DEA to the two frontiers case with respect to a privileged direction. A particular attention is paid to the treatment of bidirectional free disposability. This model is motivated by the analysis of survey data consisting of a set of contracts described in the space of price and attributes.
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The research underlying this paper has been performed within the framework of the second Scientific Support Plan for a sustainable Development Policy (SPSP II) for the account of the Belgian State, Prime Minister’s Office–Federal Science Policy Office (contract:CP/17/361). Financial support from the IAP research network nr P5/24 of the Belgian Government (Federal Office for Scientific, Technical and Cultural Affairs) is also acknowledged. The authors are also grateful to L. Simar for comments leading to a substantial improvement in the presentation of the main argument. Comments by the participants of the Journée de Microéconomie Appliquée (Lille, 2004), particularly of the official discussant, K. Kerstens, by Paul Wilson and by three anonymous referees have also been instrumental in enhancing further clarification of a previous version.
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Mouchart, M., Vandresse, M. A double-frontier approach for measuring market imperfection. Ann Oper Res 173, 137–144 (2010). https://doi.org/10.1007/s10479-008-0499-7
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DOI: https://doi.org/10.1007/s10479-008-0499-7