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Rational Inefficiencies

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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.

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Authors and Affiliations

  1. Department of Economics, Royal Agricultural University, Rolighedsvej 23, 1958, Frederiksberg C, Denmark

    Peter Bogetoft

  2. Institute of Economics, University of Copenhagen, Denmark

    Jens Leth Hougaard

Authors
  1. Peter Bogetoft
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  2. Jens Leth Hougaard
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Bogetoft, P., Hougaard, J.L. Rational Inefficiencies. Journal of Productivity Analysis 20, 243–271 (2003). https://doi.org/10.1023/A:1027347616038

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