DEA PRICING SYSTEM

Abstract This research presents a new application of Data Envelopment Analysis (DEA) to empirically determine prices of multiple products. The DEA technique is now widely applied to performance analysis and efficiency measurement in economics, business and other areas in social science. This study does not explore such conventional DEA uses, rather directing towards a new DEA application to the determination of a marginal cost pricing system or a profit-based pricing system. Nonlinear properties of the new DEA approach are explored in this research. 1