Research On Data Envelopment Analysis Models Based On Characteristics Of Market Competition

Efficiency is the issue concerned most by decision making units(DMUs)that participate in market competition,such as enterprises.It can reflect the performance of current production and operation,and is also the main basis for making decision and plan.Due to the powerfulness on efficiency evaluation and decision analysis,data envelopment analysis(DEA)has long been treated as an important management tool.With the development of society,the existing DEA models fail to fully satisfy the management demands in various market.This paper focuses on several typical characteristics of market competition,including winner-take-all,fixed-sum outputs,non-homogeneous inputs,and finds some important problems which are necessary to be solved.Then,DEA models are put forward to address the problems.The main work of this paper are expressed as follows.The first issue is the competitiveness evaluation of DMUs in winner-take-all environment.The market concentration has been enhanced in many fields,and winner-take-all becomes a common feature in market competition.In the winner-takes-all circumstance,DMUs are involved in a fiercer and more brutal competition.The accurate assessment of competitiveness can help them make strategic adjustments in time so as to avoid early exit.Existing studies generally use efficiency to express competitiveness directly,but in winner-takes-all competition,only a small number of those who perform particularly outstanding have the potential of competition,and the difference in efficiency cannot truly reflect the gap in competitiveness.This paper proposes a DEA model to evaluate the competitiveness of DMUs composed of several subunits located in parallel regions.The study first evaluates the efficiency of each subunit considering the market demand,and then evaluates the competitiveness of the subunit according to the efficiency and regional importance under the winner-take-all rule.The overall competitiveness of a DMU is the aggregation of the competitiveness of its subunits.The second issue is the evaluation of competition efficiency for two-stage systems with fixed-sum outputs.In a mature and stable market,the market demand of a product is fixed in the short term,then the total output of the product from all DMUs is generally consistent with the total demand.When the sums of outputs are fixed,all DMUs compete around the outputs,and some DMUs cannot be projected into the frontier of technology.Then,the efficiency should be evaluated based on the equilibrium efficient frontier determined by the competition,rather than the frontier of technology.DEA studies have analyzed the competition efficiency for single-stage systems with fixed-sum outputs.This paper focuses on the simplest and most representative network system,namely the basic two-stage system,and discusses the competition efficiency of network systems for the first time.Firstly,it discusses the competition among two-stage systems how to reach an equilibrium state by adjusting intermediate outputs and fixed-sum outputs,when the intermediate outputs can only be internally transferred.Then,it researches the competition efficiency when the intermediate outputs can be transferred across systems.This paper finds that it is easier to achieve an equilibrium in competition when the intermediate outputs are adjusted,and the direct competition around fixed-sum outputs can be avoided if intermediate outputs can be transferred across systems.The third issue is the efficiency evaluation of non-homogeneous DMUs with inconsistent input quality.Classical DEA theories require that all DMUs in a reference set should be completely homogeneous.Due to the shortage of resources and inequality of DMUs’ competitiveness,it is nearly impossible that DMUs in certain fields are totally homogeneous.Besides the difference in quantities of inputs and outputs,inconsistency can also be found across DMUs in set and quality of inputs or outputs.Some studies have discussed the non-homogeneous issue that input or output sets are different across DMUs.For the first time,this paper addresses the non-homogeneous problem of inconsistent input quality across DMUs.In this paper,the quality of an input is considered as the aggregation of influence that this input’s attributes exert on the production.This paper gives functions to build the input quality index,and proposes efficiency evaluation models.In models,weight restrictions are used to express the difference of input quality across DMUs.The contributions of this paper can summarized as follows.Firstly,this paper takes the market demand into account in competitiveness evaluation of DMUs under winner-take-all environment,and breaks the framework of classical DEA to propose an efficiency evaluation model which allows DMUs to be projected into points within the production possibility set.Secondly,this paper considers the exterior transfer of intermediate outputs for the first time in the evaluation of competition efficiency for two-stage systems with fixed-sum outputs,and expresses the value difference between the internally transferred and externally transferred intermediate outputs by weights.Thirdly,this paper first focuses on the non-homogeneous issue of inconsistent input quality,and innovates the theory of weight restriction to reflect the inconsistent qualities of an input in various DMUs by allowing the input to has inconsistent weights across DMUs.In conclusion,this paper finds several key problems which the existing studies never discuss or discuss superficially but really need to be solved,by analyzing the main characteristics of market competition,then proposes DEA models to solve the problems.The research of this paper enriches the system of DEA theories and improves the applicability of DEA.