Constrained game formulations and interpretations for data envelopment analysis

Constrained game formulations are provided for DEA (Data Envelopment Analysis) which extend the original (unconstrained) game formulations of R. Banker. Interpretations are also supplied which show how the optimal solutions may be used to improve the efficiency of DMUs (Decision Making Units) being evaluated with repeated uses of DEA. Uses of these ideas in testing for the presence of ‘organization slack’, are described, as in the literature of organization theory. Possibilities are also suggested for uses of game theory to study tendencies toward specialization by some DMUs, including specializing tendencies which take the form of developing new products or undertaking other activities to escape pressures from the repeated use of relative evaluations that are present in market competition as well as DEA.