X efficiency

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X-Efficiency is a term used in economics and describes the efficiency with which a given set of inputs (e.g. labor , capital, etc.) is used to produce an output ( product ). If a company produces the maximum output with the given resources such as machines, technology, employees etc., it produces x-efficiently, if it produces less than the maximum output, it produces x-inefficiently.

In neoclassical theory, under the condition of full competition , all companies produce by definition x-efficiently, since every company that produces less efficiently than another cannot survive in the market in the long term.

Harvey Leibenstein tried to show that, in many interesting economic situations, allocative inefficiency alone explains only very little of the welfare losses accepted. The non-allocative component, which explains the vast majority of the rest, he called X-inefficiency . With this term he named the problem, which in his opinion has an even greater relevance than the allocative efficiency with which microeconomics has been concerned up to now, namely: to theoretically determine the reasons for this hitherto unexplained residual quantity.

See also

Individual evidence

  1. ↑ Harvey Leibenstein: Beyond Economic Man: A New Foundation for Microeconomics. Harvard University Press: Cambridge, Mass. 1976. p. 9

literature

  • Leibenstein, Harvey: "Allocative Efficiency and X-Efficiency", The American Economic Review, 56 (1966), pp. 392-415.
  • Stigler, George J .: "The Xistence of X-Efficiency", The American Economic Review, Vol. 66, no. 1 (Mar., 1976), pp. 213–216 (review of Leibenstein's article from 1966)
  • Leibenstein, Harvey: "X-Inefficiency Xists: Reply to an Xorcist", The American Economic Review, Vol. 68, no. 1 (Mar., 1978), pp. 203–211 (reply to Stigler's criticism)
  • Leibenstein, Harvey: "On the Basic Proposition of X-Efficiency Theory", The American Economic Review, Vol. 68, no. 2, Papers and Proceedings of the Ninetieth Annual Meeting of the American Economic Association (May, 1978), pp. 328-332
  • Leibenstein, Harvey: "A Branch of Economics is Missing: Micro-Micro Theory," Journal of Economic Literature, 17 (1979), pp. 477-502
  • Leibenstein, Harvey: "The General X-Efficiency Paradigm and the Role of the Entrepreneur", in: Rizzo, MJ (Ed.): Time, Uncertainty, and Disequilibrium: Exploration of Austrian Themes, Lexington, Massachusetts 1979, p. 127– 139.
  • Leibenstein, Harvey: "X-Efficiency: From Concept to Theory," Challenge, 22 (1979), pp. 13–22 (This article is comparatively easy to understand and not very formal).
  • Taylor, Frederick (1913): "The Principles of Scientific Management".
  • Williamson, Oliver (1995): "Transaction Cost Economics and Organization Theory", in: ders .: Organization Theory: From Chester Barnard to the Present and Beyond. Pp. 207-256 (232 f.).