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- Title
Bi-level Programing Merger Evaluation and Application to Banking Operations.
- Authors
Wu, Desheng Dash; Luo, Cuicui; Wang, Haofei; Birge, John R.
- Abstract
The potential for operational efficiency improvement is a key consideration for firms contemplating the consolidation of both internal and external business units. This paper develops a leader-follower game model to assess such potential gains from the merger of different organizations with constrained resources. A profit-sharing strategy and algorithm are proposed to solve the model while maintaining incentive compatibility within each unit's decision-making process. This paper further demonstrates that in a framework, within the data envelopment analysis paradigm, a supply chain with an upstream leader and downstream followers is efficient if and only if both the leader and the followers are individually efficient. A case study of a banking operations merger shows how incentive compatible merger of operations can produce overall efficiency improvement.
- Subjects
MERGERS &; acquisitions; BUSINESS enterprises; BUSINESS forecasting; PRODUCTION management (Manufacturing); DATA analysis
- Publication
Production & Operations Management, 2016, Vol 25, Issue 3, p498
- ISSN
1059-1478
- Publication type
Article
- DOI
10.1111/poms.12205