X-Efficiency: Getting on the campaign trail!!

Thursday, April 21, 2005

Getting on the campaign trail!!

Well, I will be on the campaign trail - in Vancouver - for the next three and a half weeks. Will try to share some good stories whenever I have time to put something up.

Should be fun!!

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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