Fuzzy Pair-wise Dominance and Implications for Technical Efficiency Performance Assessment

Classically, the concept of efficiency measurement is based on the definition of a frontier that envelops the observed production plans. The efficiency score itself is based on the distance of an observed production plan from this frontier. The frontier along with the required technological assumptions (such as convexity) needed for its definition may be replaced with the concept of pair-wise dominance. This concept leads to a classification scheme for all production plans instead of a ranking based on efficiency scores. Also, the traditional assumption of deterministic or crisp production plans may be substituted with the weaker assumption of fuzzy production plans as proposed by fuzzy set theory. This paper merges these two concepts and defines a new classification scheme based on fuzzy dominance.