A Directional Distance Function Approach to Void the Non-Archimedean in DEA

Fare, Rolf and Charles, V (2018) A Directional Distance Function Approach to Void the Non-Archimedean in DEA. Journal of the Operational Research Society. ISSN 0160-5682

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Abstract

Over the past years, the data envelopment analysis (DEA) methodology has registered widespread use among researchers from many fields. Furthermore, it is important to note that the non-Archimedean infinitesimal, $\epsilon$, is a key concept in DEA models. Nevertheless, it is known that some computational difficulties arise when using $\epsilon$ in DEA. In this short communication, we show how the non-Archimedean may be voided using a directional distance function approach. Thus, our approach avoids choosing a real number ($10^{-5}$ or $10^{-6}$) as a value for $\epsilon$ or estimating the same.

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