X-Efficiency: Things will Be Very Slow on This Blog!!

Saturday, May 27, 2006

Things will Be Very Slow on This Blog!!

I will not be doing much blogging, unless I see something really interesting. Why?? Thanks to the MA Project. That thing is progressing in full force right now.

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"A monopolist may be X-inefficient either because it does not have an incentive to be more efficient due to lack of competition or it does not have the opportunity to observe and learn from other more efficient firms in the industry. In an industry high profits may imply high prices due to x-inefficiency. However, excess profits do not necessarily mean that consumers are paying higher prices. And, lack of excess profit does not necessarily indicate competition or cost efficiency." Leibenstein, Harvey. 1966. "Allocative Efficiency vs. 'X-Efficiency'," American Economic Review 56, (June), pp. 392-415