APPLYING GAME THEORY IN SOLVING THE NETWORK DATA ENVELOPMENT ANALYSIS

Abstract

Data Envelopment Analysis (DEA) has been approved that one of the most effective tools to measure and rank operating efficiency of decision making units (DMU). Deriving from the productions which is becoming more and more complex nowadays in the real world, researchers has been continously developed the network models to better reflect those productions. In this paper, the author addresses the potencial conflict in apply traditional DEA model to solve the two-stage network process. The author also proposed the use of models based on the game theory to solve that conflict. The proposed models are appropriate with situations in which there exists reliable information about the leader or follower stage in the network system.