Title:Nash Equilibrium in Data Envelopment Analysis

Speaker:Chia-Yen Lee (Associate Professor of National Cheng Kung University)

Time:Monday, July 09, 2018, 10:00 am

Venue:Conference Room 4, Science and Technology International Education Exchange Building, Beijing Institute of Technology

Speaker Profile:

　　Dr. Li Jiayan is currently an associate professor at the Institute of Manufacturing Consulting and Systems at National Cheng Kung University in Taiwan and holds a Ph.D. in Industrial and Systems Engineering from Texas A&M University. Research areas include: production and efficiency analysis, data science, smart manufacturing systems, stochastic optimization of energy and pollution, semiconductor manufacturing, fasteners, petrochemicals, etc. He is currently the Associate Editor of the Flexible Services and Manufacturing Journal. The research results are published in the European Journal of Operational Research, IEEE Transactions on Power Systems, Annals of Operations Research, and Applied Soft Computing. He has won the Ta-You Wu Distinguished Young Scholar Award (2017), Outstanding Young Scholar Award (2014, 2017), Best Practice Paper Award (2016) and the Outstanding Young Industrial Engineer Award (2016).

Brief introduction:

　　Due to the trends of market structure, carbon emission, partial deregulation, each player or decision-making unit (DMU) would like to maximize its individual profit in an imperfectly competitive market. However, a typical data envelopment analysis (DEA) implicitly assuming a perfectly competitive market with exogenous price may violate the practical assumptions, in particular, energy market. Nash equilibrium plays an important role to address these issues and empower the framework of DEA. This study reviews the recent advanced research about Nash equilibrium in DEA, which formulated the profit maximization problem with undesirable outputs and be transformed into the mixed complementarity problem (MiCP) for identifying the Nash equilibrium. Nash solution flourishes the DEA studies such as showing the rational inefficiency, Nash profit efficiency estimation, mixed strategy Nash equilibrium, Nash marginal abatement cost estimation, Nash allocation of emission permit (AEP), etc. Several empirical studies of coal-fired power plants have been conducted to validate the proposed Nash models. The results show that the Nash DEA complements typical DEA researches, and provide the managerial insight for driving productivity in an imperfectly competitive markets.