Cross-efficiency aggregation method considering bounded rationality: An application to healthcare service

Abstract

The cross-efficiency evaluation method is a powerful tool for assessing efficiency. However, previous research has often overlooked the bounded rationality of decision makers (DMs), thereby neglecting key factors. To address this gap, we investigate the cross-efficiency weight aggregation method under bounded rationality. Firstly, we develop a utility function incorporating inequality aversion and overconfidence, integrating them into the cross-efficiency weight aggregation process to formulate the equity-minded cross-efficiency method. Secondly, building upon this method, we address consensus issues within evaluation groups by introducing a consensus compromise algorithm. This algorithm aims to reconcile group opinions based on the principles of the equity-minded cross-efficiency approach. Furthermore, we apply our model to evaluate healthcare service efficiency in China. Our analysis explores the impact of overconfidence and fairness preferences, using a Tobit regression model to examine factors influencing healthcare service efficiency.