Economic cross-efficiency

This paper introduces a series of new concepts under the name Economic Cross-Efficiency, which is rendered operational through Data Envelopment Analysis (DEA) techniques. To achieve this goal, from theoretical perspective, we connect two key topics in efficiency literature that have been unrelated until now: economic and cross-efficiency. In particular, it shown that, input (output) homotheticity, traditional bilateral notion cross-efficiency for unit l, when weights an alternative counterpart k are used evaluation, coincides with well-known Farrell cost (revenue) evaluated l as market prices. motivates introduction concept Cross-Efficiency (FCE) based upon Farrell's efficiency. One advantage FCE well defined Variable Returns to Scale (VRS), yielding scores between zero one natural way, thereby improving its standard counterpart. complete analysis extend Nerlovian cross-inefficiency (NCI), on dual relationship profit inefficiency directional distance function. Finally, illustrate models recently compiled dataset European warehouses.