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Showing 1 results for Pareto Efficiency.
Dr Hassan Rostamzadeh, Dr Ali Reza Fakharzadeh,
Volume 17, Issue 1 (5-2026)
Abstract
Existing merger approaches in data envelopment analysis integrate decision-making units in a single stage, but in practice, merging units may not be possible or affordable at once. We propose a finite multi-stage framework for the gradual merger of decision-making units that incorporates practical constraints. The model determines input and output contributions of the merged units at each stage and constructs a strictly increasing efficiency sequence that converges to a Pareto-efficient state. Each new unit is optimized using both input and output orientation while preserving a uniform return to scale type across stages. The framework is validated through a multi-stage merger application on a subset of Iranian banks.
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