Peter Bogetoft

Secure Multiparty Computation Goes Live

In this note, we report on the first large-scale and practical application of secure multiparty computation, which took place in January 2008. We also report on the novel cryptographic protocols that were used.

DEA and Activity Planning under Asymmetric Information

The productivity analysis literature has traditionally focused on the evaluation of past performances. In this paper, we consider the post productivity analysis problem of deciding which production plans to choose in the future given information from a productivity analysis. In particular, we demonstrate that Data Envelopment Analysis (DEA) has an important role to play in the reallocation game following a normal productivity analysis. DEA estimates reduce the information rents an agent can extract by “claiming” high costs for the least reduced or most expanded activity. We also examine how to optimally combine DEA estimates with other information in a planning context, including preference information, ex-ante cost reports and ex-post cost data.

A practical implementation of secure auctions based on multiparty integer computation

In this paper we consider the problem of constructing secure auctions based on techniques from modern cryptography. We combine knowledge from economics, threshold cryptography and security engineering to implement secure auctions for practical real-world problems.

Efficiency Evaluations Based on Potential (Non-Proportional) Improvements

Efficiency evaluation of a Decision Making Unit (DMU) involves two issues: 1) selection of an appropriate reference plan against which to evaluate the DMU and 2) measurement of performance slack. In the literature, these issues are mixed in one and the same operation but we argue that it has theoretical as well as practical advantages to separate them. We provide an axiomatic characterization of the implicit Farrell selection. This approach, ignores important aspects of the technology by focussing on proportional variations in inputs (or outputs). We propose a new approach where potential improvements are used to guide the selection of reference plans. A characterization of this approach is provided and an associated translation invariant, strictly monotonous and continuous efficiency index is suggested.

Incentive plans for productive efficiency, innovation and learning

In many industries where production or sales is delegated to a number of subunits, the central management faces the classical problem how to induce continuous efficiency improvements, organizational learning and transfer of knowledge with a minimum of control exercised. This paper draws on recent results regarding regulatory frameworks to construct simple, yet powerful incentive schemes for decentralized production under asymmetric information. The theoretical foundation is based on principal–agent theory (cf. Laffont and Tirole, Econometrica 56 (1986) 614–641) and extensions to production theory by Bogetoft (Management Science 40 (1994) 959–968). The proposed incentive system is operational and makes use of available information to provide positive incentives for participation in the dynamic development of the entire organization.

Incentives and productivity measurements

Abstract In this paper, we discuss how to evaluate productivity measures from the point of view of incentive provision in a decentralized organization. Two perspectives are introduced. One is concerned with the set of production plans that Decision Making Units (DMUs) can be motivated to implement and the other with the costs of providing such motivations. We also examine how a particular class of productivity measures, namely those based on Data Envelopment Analysis (DEA), may contribute to the incentives of DMUs. The need to reward “over-efficient” DMUs is emphasized, and it is shown that a simple refinement of the original DEA measure may support the implementation of a large class of production plans.

Potential gains from hospital mergers in Denmark

The Danish hospital sector faces a major rebuilding program to centralize activity in fewer and larger hospitals. We aim to conduct an efficiency analysis of hospitals and to estimate the potential cost savings from the planned hospital mergers. We use Data Envelopment Analysis (DEA) to estimate a cost frontier. Based on this analysis, we calculate an efficiency score for each hospital and estimate the potential gains from the proposed mergers by comparing individual efficiencies with the efficiency of the combined hospitals. Furthermore, we apply a decomposition algorithm to split merger gains into technical efficiency, size (scale) and harmony (mix) gains. The motivation for this decomposition is that some of the apparent merger gains may actually be available with less than a full-scale merger, e.g., by sharing best practices and reallocating certain resources and tasks. Our results suggest that many hospitals are technically inefficient, and the expected “best practice” hospitals are quite efficient. Also, some mergers do not seem to lower costs. This finding indicates that some merged hospitals become too large and therefore experience diseconomies of scale. Other mergers lead to considerable cost reductions; we find potential gains resulting from learning better practices and the exploitation of economies of scope. To ensure robustness, we conduct a sensitivity analysis using two alternative returns-to-scale assumptions and two alternative estimation approaches. We consistently find potential gains from improving the technical efficiency and the exploitation of economies of scope from mergers.

Allocative Efficiency of Technically Inefficient Production Units

We discuss how to measure allocative efficiency without presuming technical efficiency. This is relevant when it is easier to introduce reallocations than improvements of technical efficiency. We compare the approach to the traditional one of assuming technical efficiency before measuring allocative efficiency. In particular, we develop necessary and sufficient conditions on the technology to ensure consistent measures and we give dual organizational interpretations of the approaches.

Super Efficiency Evaluations Based on Potential Slack

Super efficiency evaluations are introduced along the lines of the potential improvements approach in Bogetoft and Hougaard (1999). Both a reference selection and a related super efficiency index is defined. The new (potential slack) super efficiency index is compared to a Farrell-based super efficiency index (as in Andersen and Petersen 1993) with respect to convex envelopment technologies.

Performance benchmarking : measuring and managing performance

Introduction to Benchmarking.- Performance Measures.- Performance Models.- Performance Analysis - DEA.- Performance Analysis - SFA.- Performance Planning.- Performance Restructuring.- Performance Contracting.- Interactive Benchmarking.