X-Efficiency: Theory, Evidence and Applications

by Roger S. Frantz

Overview

Traditional microeconomic theory is concerned with the allocation of scarce resources through the mechanism of prices and markets. The efficient allocation of resources by prices and markets is called allocative efficiency. In emphasizing the allocative function of prices and markets, microeconomic theory has ignored the allocation of resources within firms, and instead assumes that firms are always internally (X) efficient, cost minimizers. X-efficiency theory shows that protection from competitive pressures produces not only allocated market-inefficiency, but inefficiency within the firm. This book is the most current, in-depth, and comprehensive review of X-efficiency theory, especially as it relates to regulatory economics and policy. It provides an understanding of X-efficiency by developing the theory, exhibiting empirical evidence, and, finally, reviewing applications of the theory.

Product Details

ISBN-13:	9780792397687
Publisher:	Springer US
Publication date:	05/31/1997
Series:	Topics in Regulatory Economics and Policy , #23
Edition description:	1997
Pages:	167
Product dimensions:	6.10(w) x 9.25(h) x 0.02(d)

Table of Contents

1. Introduction.- 1.1. Introduction.- 1.2. X and Allocative Efficiency and the Welfare Losses From Monopoly Power.- 1.3. X-Efficiency and the Neoclassical Production and Cost Functions.- 1.4. The Development of XE Theory.- 1.5. XE Theory and Generalized Neoclassical Theory.- 1.6. XE as a Research Design.- 1.7. Empirical Research on XE Theory.- 1.8. Critics of XE Theory.- 2. Production, Cost, and Welfare: A Review.- 2.1. Introduction.- 2.2. The Firm in the Short Run.- 2.3. The Firm in the Long Run.- 2.4. Firms, Markets, and Efficiency.- 2.5. Implications.- 3. X-Efficiency: The Intellectual Setting and an Introduction to the Theory.- 3.1. Introduction.- 3.2. Complex Objective Functions.- 3.3. Rent-Seeking Behavior.- 3.4. Simon and the Carnegie School.- 3.5. XE Theory: An Introduction.- 3.6. X-Efficiency.- 3.7. Conclusions.- 4. X-EfficiencyTheory: 1.- 4.1. Introduction.- 4.2. The Individual in XE Theory.- 4.3. Conclusions.- 5. X-Efficiency Theory: 2.- 5.1. Introduction.- 5.2. Individual Effort and the Inert Area.- 5.3. Intrafirm Determinants of Individual and Group Effort.- 5.4. Productivity, Effort Conventions, and the Prisoner’s Dilemma.- 5.5. Market Structure, Pressure and Effort.- 5.6. A Synthesis and an Illustration.- 5.7. Implications and Conclusions.- 6. Empirical Evidence: Regulated Industries.- 6.1. Introduction.- 6.2 Empirical Studies.- 6.3 Conclusions.- 7. Empirical Evidence: Market Structure and Firm Organization.- 7.1. Introduction.- 7.2. Owner vs. Manager Controlled Firms.- 7.3. Market and Firm Concentration.- 7.4. Public vs. Private Ownership.- 7.5. Other Ownership Studies.- 7.6. Conclusions.- 8. Empirical Studies: Input Ratios and International Trade.- 8.1. Introduction.- 8.2. Input Ratios.- 8.3. Exports and Effective Protection From Competition.- 8.4.Conclusions.- 9. X-Efficiency, Its Critics, and a Reply.- 9.1. Introduction.- 9.2. Rent-Seeking.- 9.3. Leisure as Output.- 9.4. Management Utility Under Competition.- 9.5. Property Rights.- 9.6. Some General Comments.- 9.7. X-Efficiency and Allocative Efficiency: What Have We Learned?.- 9.8. Conclusions.- 10. Implications and Conclusions.- 10.1. X and Allocative Efficiency.- 10.2. X-Efficiency Theory as a Research Design.- 10.3. X-Efficiency and Its Critics.- 10.4. X-Efficiency Theory and Neoclassical Theory: Some Final Thoughts.- References.

Editorial Reviews

‘The major contribution, in my opinion, is that it provides a rich resource for the use of any scholar who wishes to learn about the x-efficiency theory and its existence in the real world. Moreover, it willprovide very valuable assistance to any researcher in any field who is studying questions of efficiency, worker motivation, and the psychology of the work place.'
Journal of Economic Behavior and Organization, 14, 1990.

From the Publisher