optimal pricing and lot sizing under conditions of perishability finite production and partial backordering and lost sale abstract perishable products constitute a sizable component of inventories common questions in a production and selling situation involving a perishable or a non perishable product are what should be the price and what should be the size of the replenishment when demand for the product is price sensitive pricing and lot sizing decisions are interdependent similarly when a product is highly perishable the demand may need to be backlogged to avoid costs due to deterioration i e perishability and backlogging are complementary conditions in this paper we consider the pricing and lot sizing problem for a perishable good under finite production exponential decay and partial backordering and lost sale the backlogging phenomenon in the literature is often modeled using backordering and lost sale costs these cost parameters however are not easy to estimate in practice in this paper we use a new approach to model backlogging of demand in this approach customers are viewed to be impatient the backlogging option gets used only when it is economic to do so we extend the analysis presented for a perishable product to the case in which the product is non perishable

efficiency analysis in banking firms an international comparison abstract the intensive process of financial european integration together with the profound transformation and deregulation that has taken place in the spanish banking system justifies the evaluation of its efficiency in comparison with that of other banking systems in this context the aim of this study is to analyze the productivity efficiency and differences in technology of several banking systems using a non parametric approach together with the malmquist index we compare the efficiency productivity and differences in technology of different european and us banking systems for the year 1992

state regulation and the structure conduct efficiency and performance of us auto insurers abstract this research investigates the impact of regulation on state automobile insurance markets while controlling for other state insurance market characteristics that may be related to performance data for a large sample of insurers are analyzed the results suggest that insurers in competitive and non stringently regulated states may benefit from market power by charging higher unit prices however insurers in these states are on average more cost x efficient and cost x efficient insurers charge lower prices and earn smaller profits the empirical results also suggest that insurers in some rate regulated states are less revenue and cost scale efficient than in competitive states

value for money german local government efficiency in a comparative perspective in this article we investigate the cost efficiency of german local governments in the state of baden wurttemberg in 2004 using a stochastic frontier approach besides being the first study on german data we add two elements to the literature first we provide a comparative perspective allowing us to embed our results in the broader literature second unlike most previous studies we explicitly account for exogenous or nondiscretionary influences when estimating municipal efficiency scores the results suggest that disregarding such exogenous factors can lead to significant and systematic bias in the estimated inefficiency levels particularly underestimation of efficiency occurs for municipalities with high tourist activity while the reverse is true for municipalities with high unemployment

efficiency and environmental factors in the us electricity transmission industry the electricity industry in most developed countries has been restructured over recent decades with the aim of improving both service quality and firm performance regulated segments e g transmission still provide the infrastructure for the competitive segments and represent a significant share of the total price paid by final customers however there is a lack of empirical studies that analyse firms performance in the electricity transmission sector in this paper an empirical analysis of us electricity transmission companies is conducted for the period 2001 2009 we use alternative stochastic frontier models that allow us to identify the determinants of firms inefficiency these models also permit us to control for weather conditions potentially one of the most decisive uncontrollable factors in electricity transmission our results suggest that weather conditions clearly have an influence on transmission costs and that there is room for improvement in the management of us electricity transmission systems regulators should also be aware that more adverse conditions generate higher levels of inefficiency and that achieving long term efficiency improvements tends to worsen firms short term relative performance

pseudolikelihood estimation of the stochastic frontier model stochastic frontier analysis is a popular tool to assess firm performance almost universally it has been applied using maximum likelihood ml estimation an alternative approach pseudolikelihood

productive efficiency performance of minority and nonminority owned banks a nonparametric approach abstract this study examines the efficiency performance of the minority owned banks mobs as multiproduct firms relative to that of the nonminority banks nmobs using a highly flexible nonparametric approach since mobs and nmobs employ distinct technologies the efficiency indices for the two groups are derived relative to their respective group specific frontiers and are contrasted to shed light on the ownership efficiency relationship the mob sample is then disaggregated and the intra group efficiency differentials are investigated the findings support the hypothesis that abstracting the regional regulatory size and maturity characteristics of banks efficiency differentials between mobs and nmobs are statistically insignificant

repeated games with frequent signals we study repeated games with frequent actions and frequent imperfect public signals where the signals are the aggregate of many discrete events such as sales or tasks the high frequency limit of the equilibrium set depends on both the probability law governing the discrete events and on how many events are aggregated into a single signal when the underlying events have a binomial distribution the limit equilibria correspond to the equilibria of the associated continuous time game with diffusion signals but other event processes that aggregate to a diffusion limit can have a different set of limit equilibria thus the continuous time game need not be a good approximation of the high frequency limit whenever the underlying events have three or more possible values

credit union policies and performances in latin america this paper presents a conceptual framework for explaining credit unions cus loan delinquency and profitability in developing countries it also offers an empirical estimation for a unique sample of cus in latin america

reputation and imperfect information abstract a common observation in the informal literature of economics and elsewhere is that is multistage games players may seek early in the game to acquire a reputation for being tough or benevolent or something else but this phenomenon is not observed in some formal game theoretic analyses of finite games such as selten s finitely repeated chain store game or in the finitely repeated prisoners dilemma we reexamine selten s model adding to it a small amount of imperfect or incomplete information about players payoffs and we find that this addition is sufficient to give rise to the reputation effect that one intuitively expects

efficiency outcomes of market concentration and managed care abstract the paper examines how hospital cost efficiency has reacted to extensive horizontal integrations of hospitals and rapid growth of managed care in the us health care industry cost efficiency is estimated by using panel data approaches to relax the assumptions for the hospital effects imposed in earlier studies the paper shows that higher managed care penetration over time is associated with greater hospital efficiency and higher market concentration is positively associated with efficiency when markets are highly competitive or highly concentrated

non minimum cost functions and the stochastic frontier on applications to health care providers by allowing firms to deviate from their optimal path for systematic reasons frontier estimators in the general literature have helped to inject more realism into econometric modelling of firms and now of hospitals and nursing homes as well unfortunately one such estimator the dea technique employed by kooreman does not allow for a stochastic error term in practice all random noise in the dea is lumped together with the true inefficiency making the resulting inefficiency scores suspect the stochastic frontier model has the advantage of disentangling the two sources of error for this reason i will address most of my comments to the papers in this issue by vitaliano and toren and by zuckerman et al that rely on maximum likelihood estimators mle another way to estimate the stochastic frontier is by using panel data techniques although the latter approach is not represented in this compendium it has certain advantages over mle which i will touch upon briefly i will also discuss other approaches that are derived more directly from economic theory that have not yet received much attention

estimating a non minimum cost function for hospitals hospital costs have been rigorously scrutinized by economists and health policy experts for several decades despite the large volume of research two related problems persist first although theoretical models of hospital behavior such as 9 and 10 suggest systematic deviations from cost minimization there has been little attention given to modelling and measuring this inefficiency second because cost minimization is a questionable maintained hypothesis most hospital cost research has not used cost functions that are dual to production technology consequently the technological concepts of scale and factor substitution are obscured we address these twin problems by developing and estimating a long run cost function that allows for systematic allocative inefficiency the parameter estimates we present also provide information on the traditional production concepts of scale and factor substitution as well as information on the size and source of allocative inefficiency in u s hospitals hospital services clearly comprise a large industry short term hospital expenditures were 120 billion in 1984 for example the u s short term hospital sector has increased in relative size by a factor of 2 5 since 1960 so that short term hospital expenditures are now about 3 6 percent of the gnp in the united states while industry size alone probably justifies an empirical investigation into the production technology for hospital services we are also motivated by the relevance of our findings to several health policy issues measures of scale economies are crucial in forming public policies concerning entry exit and mergers in the hospital industry yet most studies have not actually estimated the technological concept of scale elasticities of factor substitution are also technological and economic concepts that should be of interest to health policy makers these measures indicate the extent to which cost increases can be avoided by substituting away from the factor whose price has increased hospital cost estimates that do not include factor

impossibility of collusion under imperfect monitoring with flexible production we show that it is impossible to achieve collusion in a duopoly when 1 goods are homogenous and firms compete in quantities 2 new imperfect information arrives continuously without sudden events and 3 firms are able to respond to this new information quickly the result holds even if we allow for asymmetric equilibria or monetary transfers the intuition is that the flexibility to respond to new information quickly unravels any collusive scheme and that signals about the aggregate behavior only cannot be used effectively to provide individual incentives via transfers our result applies both to a simple stationary model and a more complicated one with prices following a mean reverting markov process

impermanent types and permanent reputations we study the impact of unobservable stochastic replacements for the long run player in the classical reputation model with a long run player and a series of short run players we provide explicit lower bounds on the nash equilibrium payoffs of a long run player both ex ante and following any positive probability history under general conditions on the convergence rates of the discount factor to one and of the rate of replacement to zero both bounds converge to the stackelberg payoff if the type space is sufficiently rich these limiting conditions hold in particular if the game is played very frequently

scale and scope economies in the multi product banking firm abstract the multi product nature of the banking firm is examined utilizing the translog cost function this analysis indicates that contrary to conventional wisdom natural monopoly scale economies and product specific decreasing costs are not robust characterizations of the banking industry there is however evidence that the cost function is characterized by economies of scope the implications of these results are discussed and extensions of this approach suggested

x inefficiency and interfirm rivalry evidence from the electric utility industry competition from the natural gas industry is shown to increase the efficiency of the work force of electric power utilities this conclusion is qualified to the extent that duopoly rivalry does not represent perfect competition in a free market as natural gas reserves decline however the impetus to improve efficiency will diminish but this will be offset by technological advances in both power generation and power transmission if regulators develop policies to encourage competitive interplay utility performance is more likely to improve 38 references 3 tables dck

systematic departures from the frontier a framework for the analysis of firm inefficiency departures from a production or cost frontier may reflect the systematic effect of conditions that contribute to inefficiency to test whether some portion of frontier function departures can be systematically explained the frontier inefficiency error component is modeled as a function of various causal factors and a random component the functional form of the inefficiency error term model is chosen to assure strict one sidedness preliminary empirical results generated from electric utility data suggest the superiority of including both systematic and random components in the inefficiency error term

review of inventory systems with deterioration since 2001 abstract this paper presents an up to date review of the advances made in the field of inventory control of perishable items deteriorating inventory the last extensive review on this topic dates back to 2001 goyal s k and giri b c recent trends in modeling of deteriorating inventory european journal of operational research 134 1 16 since then over two hundred articles on this subject have been published in the major journals on inventory control indicating the need for a new review we use the classification of goyal and giri based on shelf life characteristics and demand characteristics contributions are highlighted by discussing main system characteristics including price discounts backordering or lost sales single or multiple items one or two warehouses single or multi echelon average cost or discounted cash flow and payment delay

are scale economies in banking elusive or illusive evidence obtained by incorporating capital structure and risk taking into models of bank production abstract this paper explores how to incorporate banks capital structure and risk taking into models of production in doing so the paper bridges the gulf between 1 the banking literature that studies moral hazard effects of bank regulation without considering the underlying microeconomics of production and 2 the literature that uses dual profit and cost functions to study the microeconomics of bank production without explicitly considering how banks production decisions influence their riskiness various production models that differ in how they account for capital structure and in the objectives they impute to bank managers cost minimization versus value maximization are estimated using u s data on highest level bank holding companies modeling the bank s objective as value maximization conveniently incorporates both market priced risk and expected cash flow into managers ranking and choice of production plans estimated scale economies are found to depend critically on how banks capital structure and risk taking are modeled in particular when equity capital in addition to debt is included in the production model and cost is computed from the value maximizing expansion path rather than the cost minimizing path banks are found to have large scale economies that increase with size moreover better diversification is associated with larger scale economies while increased risk taking and inefficient risk taking are associated with smaller scale economies

takeover activity among financial mutuals an analysis of target characteristics abstract this paper presents an empirical investigation of the merger process among mutuals using a large pooled cross section time series sample of uk building societies between 1981 and 1993 the financial services industry is probably unique in having a substantial mutual sector coexisting with and competing against joint stock firms however given the severely attenuated system of ownership claims in the financial mutual it has been widely predicted that this form will exhibit strong behavioural differences from the stock sector it is surprising therefore that despite the important governance role accorded to mergers in the corporate literature the merger process among financial mutuals has been almost totally ignored this paper explores the mutual merger process via an examination of the targets characteristics it finds little support for the natural selection view of mutual acquisitions but it does reveal the importance of the regulatory process above all the results show a surprising similarity to those from studies of the merger process in joint stock firms

preservation technology investment for deteriorating inventory abstract the objective of this study is to develop a deteriorating inventory policy when the retailer invests on the preservation technology to reduce the rate of product deterioration a solution procedure is presented to determine an optimal replenishment cycle shortage period order quantity and preservation technology cost such that the total profit per unit time is maximized a numerical example and sensitivity analysis are presented to illustrate the model

efficiency gains from port reform and the potential for yardstick competition lessons from mexico abstract this paper shows how measures of relative efficiency performance could promote yardstick competition between port infrastructure operators the illustration is based on a study of the efficiency effects of the mexican 1993 port reform it covers 1996 99 and relies on a stochastic production frontier to show that mexico s ports achieved 2 8 3 3 average annual efficiency gains since reform the port specific measures point to consistent leaders and laggards which would not all be identified by common partial productivity indicators this information could be built into an explicit incentive based regulatory regime aiming at promoting catch up by laggards

organizational form and efficiency the coexistence of stock and mutual property liability insurers this article introduces a new approach cross frontier analysis for estimating the relative efficiency of alternative organizational forms in an industry the technique is illustrated by analyzing a sample of stock and mutual property liability insurers using nonparametric frontier efficiency methods cross frontier analysis measures the relative efficiency of each organizational form by computing the efficiency of each stock mutual firm relative to a reference set consisting of all mutual stock firms we test agency theoretic hypotheses about organizational form including the managerial discretion and expense preference hypotheses the results indicate that stocks and mutuals are operating on separate production and cost frontiers and thus represent distinct technologies consistent with the managerial discretion hypothesis the stock technology dominates the mutual technology for producing stock outputs and the mutual technology dominates the stock technology for producing mutual outputs however consistent with the expense preference hypothesis the stock cost frontier dominates the mutual cost frontier our findings thus suggest a richer interpretation of organizational form than provided by previous researchers

the effect of organizational structure on efficiency evidence from the spanish insurance industry this paper provides new information on the effects of organizational structure on efficiency by analyzing spanish stock and mutual insurers over the period 1989 1997 we test the efficient structure hypothesis which predicts that the market will sort organizational forms into market segments where they have comparative advantages and the expense preference hypothesis which predicts that mutuals will be less efficient than stocks technical cost and revenue frontiers are estimated using data envelopment analysis the results indicate that stocks and mutuals are operating on separate production cost and revenue frontiers and thus represent distinct technologies in cost and revenue efficiency stocks of all sizes dominate mutuals in the production of stock output vectors and smaller mutuals dominate stocks in the production of mutual output vectors larger mutuals are neither dominated by nor dominant over stocks in the cost and revenue comparisons thus large mutuals appear to be vulnerable to competition from stock insurers in spain overall the results are consistent with the efficient structure hypothesis but are generally not consistent with the expense preference hypothesis

behavior of the firm under regulatory constraint a recent article by akira takayama discusses an earlier paper by harvey averch and leland l johnson on fair rate of return regulation of public utilities although takayama p 255 agrees with averch and johnson s general conclusions that a firm will tend to increase its investment with the introduction of an active constraint on its rate of return he criticizes the a j argument as being confusing ambiguous and in error takayama then attempts a clarification and presents a new formulation which leads to the a j result quoted above this comment will discuss several of takayama s criticisms in addition to showing that the so called a j effect cannot be derived from the basic assumptions made by both averch and johnson and takayama 1 we will show that the very assumptions used to prove the a j effect by defining the region of x require an assumption that the a j effect exists in the first place

efficiency in new zealand sheep and beef farming the impacts of regulatory reform in this study we consider the impacts of dramatic regulatory reform during the 1980s on the efficiency of farms in new zealand using unbalanced panel data a translog distance function representing the multiple output and input technology and incorporating nonneutral regulatory impacts is used for the analysis determinants of technical inefficiency including a regulatory variable a time term and a debt equity ratio are also incorporated in a one step model estimated by maximum likelihood stochastic production frontier methods we find evidence of regulatory induced changes in output composition toward beef and deer and away from wool and especially lamb but little associated technical inefficiency these patterns motivated investment in complementary capital land and beef deer livestock inputs firms that were more flexible in their adaptation toward these new mixes adjusted to regulatory changes with less upheaval so any existing inefficiency appears linked to debt equity levels

farmers health and agricultural productivity agriculture is one of the most hazardous productive sectors around the world most previous studies have focused on health issues of farmers in developing countries while little attention has been paid to farmers health problems in developed countries the present study assesses the effect of farmers health conditions on agricultural productivity in norway employing stochastic frontier regression techniques we conclude that differences in farmers health help to explain the variance in agricultural production efficiency

an application of tournament genetic algorithm in a marketing oriented economic production lot size model for deteriorating items abstract the goal of this research is to discuss an application of tournament genetic algorithm tga for solving an economic production lot size epl model in this model the production rate of the item is finite and it is assumed to be a decision variable the demand rate is also a deterministic function of selling price and the marketing cost the selling price per unit item is determined by a mark up over the unit production cost the deterioration rate at any instant is a linear increasing decreasing function of time partial backlogging shortages are allowed with a variable rate dependent on the length of the waiting time up to the starting of next production this model is formulated as a highly non linear constrained optimization problem to solve this problem a tga with steady state selection whole arithmetic crossover and non uniform mutation has been developed and applied the model has been illustrated with three numerical examples finally sensitivity analyses have been shown graphically to study the variations of the average profit with respect to the different parameters

reputation and the flow of information in repeated games this paper derives payoff bounds from reputation effects akin to those of fudenberg and levine 1992 for repeated moral hazard games in which a long run player interacts frequently with a population of short run players and the monitoring technology varies with the length of the period of interaction the bounds depend on the monitoring technology through the flow of information a measure of signal informativeness per unit of time based on the relative entropy examples are shown where under complete informatione the set of equilibrium payoffs of the long run player converges as the period length tends to zero to the set of static equilibrium payoffs whereas when the game is perturbed by a small ex ante probability on commitment types reputation effects remain powerful in the frequent interaction limit

bank capitalization and cost evidence of scale economies in risk management and signaling we amend the standard cost model to account for the role of financial capital in banking the cost function is conditioned on the level of capital but we model the demand for financial capital so that it can serve as a cushion against insolvency for potentially risk averse managers and as a signal of risk for less informed outsiders scale economies are then computed without assuming that the bank chooses a level of capitalization that minimizes cost we find evidence of substantial scale economies and that bank managers are risk averse and use the level of financial capital to signal the level of risk

predation reputation and entry deterrence abstract economists often argue that predatory practices are irrational since there exist cheaper or more certain means to gain or maintain a monopoly our gametheoretic equilibrium analysis suggests that if a firm is threatened by several potential entrants then predation may be rational against early entrants even if it is costly when viewed in isolation because it yields a reputation which deters other entrants asymmetric information plays a crucial role in our analysis since it provides the rationale for entrants to base their expectations of the firm s future behavior on its past actions the analysis also suggests methods to treat general reputational phenomena

technical efficiency market share and profitability of manufacturing firms in cote d ivoire the technology trap this paper investigates the sources of inefficiency of firms in cote d ivoire and exam ines to what extent these effects translate into poor performance a large majority of firms is technically inefficient producing far below the maximum attainable output level major cost savings can also be realised through enlarging the scale of activities of firms efficiency gains and scale advantages translate into a better competitive position and via their impact on market share into higher profitability however severe growth barriers and imperfect markets keep firms from realising these gains and prevent firms from catching up in technology with respect to their larger older and often foreign owned competitors

variations of order level inventory models for deteriorating items abstract order level inventory models for deteriorating items have been developed and solved with and without shortages the finite production rate is proportional to the demand rate which is time dependent the rate of deterioration also is taken to be time variable illustrative numerical examples are given and significant features of the results are discussed

the demise of the mutual organizational form an investigation of the life insurance industry we investigate the role of organizational structure in financial services markets by examining the u s life insurance industry traditionally stock and mutual life insurers were equally represented but now the industry is mainly composed of stock firms we find operational efficiency access to capital and tax savings are important determinants for this shift the incentive to demutualize differs by the type of conversion full demutualization is chosen for efficiency and access to capital reasons and partial conversion using a mutual holding company is chosen for tax savings firm operational efficiency improves after conversion we also find the efficiency of the stock organizational form dominates that of the mutual structure during our sample period 1995 to 2004

efficiency in the savings and loan industry abstract the stochastic econometric cost frontier approach is modified to investigate efficiency in mutual and stock s ls using 1991 data on u s s ls this methodology allows both the cost frontier and error structures to differ between s ls of these two ownership forms a likelihood ratio test indicates that the data support this unrestricted model which implies efficient mutual and stock s ls use different production technologies various measures of inefficiency show that on average stock s ls are less efficient than mutual s ls the second part of the article relates the inefficiency measures to several correlates

merging reputation and repeated games with incomplete information we relate and unify several results that appeared in the following domains merging of probabilities perturbed games and reputation phenomena and repeated games with incomplete information journal of economic literature classification numbers c72 d83

wto challenges and efficiency of chinese banks after joining the world trade organisation wto in december 2001 china was given 5 years to completely open up its banking market for international competition chinese banks have been renowned for their mounting nonperforming loans and low efficiency despite gradual reforms the banking system is still dominated by state ownership and encapsulated monopolistic control how to raise efficiency is a key to the survival and success of domestic banks especially the state owned commercial banks two important factors may be responsible for raising efficiency ownership reform and hard budget constraints this article uses a panel data of 22 banks over the period 1995 to 2001 and employs a stochastic frontier production function to investigate the effects of ownership structure and hard budget constraint on efficiency empirical results suggest that nonstate banks were 8 18 more efficient than state banks and that banks facing a harder budget tend to perform better than those heavily capitalized by the

productivity and efficiency analysis software an exploratory bibliographical survey of the options the software available to implement and carry out efficiency analysis is crucial for the diffusion of efficiency frontier techniques among applied researchers and policy makers the implementation of up to date productivity and efficiency analysis is indeed important to advance our knowledge in many fields ranging from the public and regulated sectors to the private ones this contribution fills a gap in the existing literature and surveys the currently available options to estimate a variety of frontier methodologies using either general or dedicated programs we outline directions for future research

fdi performance a stochastic frontier analysis of location and variance determinants the opening up process of the eastern european countries was marked by greater integration of fdi with their western neighbouring countries using the single step ml approach to stochastic frontier analysis the location and variance determinants of fdi are estimated using the knowledge capital kk model framework the findings based on a panel of bilateral fdi stocks from 10 western to 10 eastern european countries over the 1996 2007 period suggest fdi is determined by both horizontal and vertical motives while the process of liberalization and infrastructural developments significantly reduces the variance of fdi in using a stochastic frontier specification of the kk model the efficiency of fdi performance is identified relative to maximum levels the bilateral efficiency scores suggest a mixed performance indicating scope to improve the efficiency of fdi

nonparametric estimation of the determinants of inefficiency in the presence of firm heterogeneity abstract we consider the application of the profile least squares method to estimate the impact of the determinants of inefficiency in the presence of panel data and unobserved individual specific heterogeneity for the stochastic frontier model this method has the advantage over previous approaches in that the effect of the determinants of inefficiency on output can be recovered nonparametrically in the presence of heterogeneity at the firm level we describe the estimator and offer a small set of monte carlo exercises that showcases the value of the method for the stochastic frontier model application of the method to assess insights generated compared to a pooled cross section approach using data from the taiwan banking system is also provided

a note on savings and loan ownership structure and expense preference a re examination this study extends the work of akella and greenbaum journal of banking finance 12 1988 419 through the use of a much larger nationwide sample of us saving and loan associations and supports their original finding of significant expense preference behavior in mutual savings and loans during their original study period 1979 80 this study also provides evidence that over the time period of substantial deregulation and changes in the competitive environment in the us financial services industry expense preference behavior for savings and loans decreased the results are consistent with the idea that the removal of barriers that restrict competition should improve managerial efficiency in firms that survive 2003 elsevier b v all rights reserved

investment climate and firm productivity an application to vietnamese manufacturing firms abstractthe fundamental aspect of a national competitive advantage is a good investment climate understanding the role of the investment climate in generating firm productivity has received extensive attention by policymakers and economists in many countries the article studies the effect of different dimensions of the investment climate on firm productivity using a large dataset of vietnamese manufacturing firms the article finds that deficiencies in the investment climate are prejudicial to firm productivity and competition furthermore in examining the effect of corruption in association with the quality of the business environment the study also investigates the possibility that corruption may compensate firms for a bad investment climate or at least may neutralize the negative impact of inefficient government regulations in other words corruption acts as speed money to improve the efficacy of the provision of public services or provides leeway for entrepreneurs to bypass the inefficient reg

the determinants of the cost efficiency of electric generating plants a stochastic frontier approach this article provides a detailed analysis of generation plant operating cost efficiency over the period 1988 1997 i estimate a stochastic frontier cost function together with a model of plant inefficiencies to measure the operating efficiencies of individual plants and identify factors that are associated with variations in plant efficiencies i find evidence that plant efficiencies are associated with capacity utilization of the plant the number of plants under utility management and ownership form i also find that regulatory restructuring activity in certain states is associated with improvements in plant operating performance the purpose of this article is to provide a detailed analysis of the operating cost efficiencies of electricity generating plants over the period 1988 1997 i estimate the operating efficiencies of fossil fueled steam generating plants and examine factors that influence plant operating performance i use the estimation procedure of battese and coelli 1995 to simultaneously estimate a stochastic frontier cost function and a function relating plant efficiency levels to plant specific factors and other explanatory variables a comprehensive data set allows me to investigate the influence of capacity utilization ownership form and utility experience on plant efficiency levels since significant regulatory change in the electricity industry had begun during this time period i also investigate the impact of state level regulatory change on plant operating efficiency a number of authors have analyzed the efficiencies of electricity generating plants relative to a best practice frontier including kopp and smith 1980 schmidt and lovell 1979 stevenson 1980 cote 1989 reifschneider and stevenson 1991 hammond 1992 pollitt 1995 and fire grosskopf and logan 1983 1985 these studies find considerable evidence of inefficiency in electricity generation during the 1960s and 1970s the present study provides more recent information regarding generating plant efficiencies during a period of significant regulatory and structural change studies investigating the determinants of power plant departures from the frontier have focused primarily on the effects of ownership mode pollitt 1995 provides a comprehensive review of these studies reifschneider and stevenson 1991 examine the impact on cost efficiency of a number of variables including the capacity utilization of the firm s generating facilities more recently knittel 2001 examines the impact of incentive regulation on plant efficiency levels steiner

productive efficiency of specialty and conventional coffee farmers in costa rica accounting for technological heterogeneity and self selection a steep decline in coffee prices at the producer level led to considerable pressure for farmers in costa rica and producer countries all over the world one possible reaction was moving to specialty markets where price pressure was perceived to be lower we use original survey data from 2002 2003 and 2003 2004 to analyze the factors influencing participation in specialty markets and to estimate separate production functions for specialty and conventional coffee farmers allowing for farm specific inefficiencies applying a sample selection framework we find significant selection bias in the sub sample of specialty farmers and evidence for the overestimation of efficiency if this bias is not adequately controlled for among the most important factors that influence farm specific efficiency levels in the two sub samples are the availability of additional income activities experience in coffee cultivation and membership in cooperatives based on the results we derive policy recommendations to improve farmers production performance and ability to cope with the effects of the coffee crisis these policy measures include the provision of extension services with respect to farm management skills the creation of income opportunities in rural areas and the support of farmer owned cooperatives

a survey of deterministic models for the eoq and epq with partial backordering models for the basic deterministic eoq or epq problem with partial backordering or backlogging make all the assumptions of the classic eoq or epq model with full backordering except that only a fraction of the demand during the stockout period is backordered in this survey we review deterministic models that have been developed over the past 40 years that address the basic models and extensions that add other considerations such as pricing perishable or deteriorating inventory time varying or stock dependent demand quantity discounts or multiple warehouses

maintaining a reputation when strategies are imperfectly observed this paper studies reputation effects in games with a single long run player whose choice of stage game strategy is imperfectly observed by his opponents we obtain lower and upper bounds on the long run player s payoff in any nash equilibrium of the game if the long run player s stage game strategy is statistically identified by the observed outcomes then for generic payoffs the upper and lower bounds both converge as the discount factor tends to 1 to the long run player s stackelberg payoff which is the most he could obtain by publicly committing himself to any strategy

testing for expense preference behavior mutual versus stock savings and loans this article investigates expense preference behavior in the savings and loan industry previous studies used an intercept test and in general concluded that managers of mutual s ls exhibit expense preference behavior i derive the necessary and sufficient conditions on cost functions for the intercept test to be valid these restrictions are rejected for the savings and loan industry stock and mutual s ls have different cost structures and both have non cobb douglas production technologies i derive a new more general test for expense preference behavior that does not require the restrictive assumptions of the intercept test the results of this test do not support earlier conclusions of managerial expense preferences