A Hybrid Approach Based on a Cross-Efficiency Model to Measure the Efficiency of Bank Currency Units in a Competitive-Cooperative Environment

Document Type : Research Paper

Authors

1 Faculty of Industrial Engineering, Yazd University, Yazd, Iran

2 Faculty of Industrial Engineering, Urmia University of Technology, Urmia, Iran

10.22070/jqepo.2022.14603.1189

Abstract

This study aims to evaluate and rank the performance of the currency units of the bank by using the integrated methods of the balanced scorecard, cross-efficiency data envelopment analysis, and game theory in a cooperative-competitive environment. In this regard, by studying the indices used to evaluate the efficacy of banks and with the help of experts in foreign exchange, seven indices are selected as inputs and outputs from four perspectives of the balanced scorecard approach. Then, by applying the proposed Nash bargaining game model in cross-efficiency in a competitive-cooperative environment, the efficiency of decision-making units is evaluated. In this way, the bank's branches compete in pairs. As a result, each branch tends to prioritize the other branch over the criteria in which they have a more significant advantage and allocate higher weight. This leads to the higher efficiency of the branch. Thus, the cross-performance matrix is ​​complemented by the performance of the bargaining model, rather than being filled by the performance of the conventional data envelopment analysis model. The proposed approach presents a new aspect of measuring performance based on the cross-efficiency model. The real case study of Isfahan Bank Melli branches is used to show the process of implementation of the model as well as the ability of the proposed approach.

Keywords

References

Arab Mazar, A.A., Hosseini, M. H. and Shafi'i, Z., (2009). Performance Evaluation of Tehran Tax Affairs Based on Balanced Scorecard Model (BSC), Special Tax Quarterly, 4 (52), 1-12.
Bailey, M., Sumaila, U.R. and Lindroos, M. (2010). Application of game theory to fisheries over three decades. Fisheries Research, 102(1-2), 1-8.
Bazrkar, A. and Iranzadeh, S. (2017). Choosing a strategic process in order to apply in Lean Six Sigma methodology for improving its performance using integrative approaches of BSC and DEA. Journal of Business and Retail Management Research, 11(4).
Chu, J., Wu, J., Chu, C. and Zhang, T. (2020). DEA-based fixed cost allocation in two-stage systems: Leader-follower and satisfaction degree bargaining game approaches. Omega, 94, 102054.
Contreras, I., Lozano, S. and Hinojosa, M.A. (2020). A DEA cross-efficiency approach based on bargaining theory. Journal of the Operational Research Society, 1-12.
Cooper, William W., Lowrence, W. and Seiford, J.Z. (2011). Handbook on Data Envelopment Analysis, Springer Publishing, Second Edition.
Du, J., Liang, L., Chen, Y., Cook, W.D. and Zhu, J. (2011). A bargaining game model for measuring performance of two-stage network structures. European Journal of Operational Research, 210(2), 390-397.
Eghbal, F. (2008). "Assessment of human resource management performance at Isfahan Medical Science based on European Foundation for Quality Management [MSc. Thesis]." Isfahan: Education University, Faculty of Education and Psychology; 2008. (In Persian).
Jahnagoshai Rezaee, M. and Moini, A. (2015). An Integrated Approach for Measuring Performance of Network structure: Case study on power plants. International Journal of Industrial Engineering & Production Research, 26(4), 255-268.
Jahangoshai Rezaee, M. and Shokry, M. (2017). Game theory versus multi-objective model for evaluating multi-level structure by using data envelopment analysis. International Journal of Management Science and Engineering Management, 12(4), 245-255.
Karimi, B. and Khorram, I. (2016). Introducing a Secondary Goal to Evaluate Cross-Performance in Data Envelopment Analysis with Undesirable Outputs, Operational Research in Its Applications,13-1 (48), 85-95.
Kashanipour, M. and Ghazizadeh, M. (2008). Identification of Variables and Relative Ratios in Measuring Bank Branch Performance, Daneshvar Behvar University of Medical Sciences Quarterly Journal, Shahed University, 15(32), 108-93.
Khaki, A., Najafi, S. and Rashidi, S. (2012). Improving efficiency of decision making units through BSC-DEA technique. Management Science Letters, 2(1), 245-252.
Kianfar, K., Namin, M.A., Tabriz, A.A., Najafi, E. and Lotfi, F.H. (2016). Presentation of a Novel Integrated DEA-BSC Model with Network Structure in Multi Objective Programmig. Int. J. Data Envelopment Analysis 3, 1-14.
Lozano, S. (2012). Information sharing in DEA: A cooperative game theory approach. European Journal of Operational Research, 222(3), 558-565.
Manandhar, R. and Tang, J.C.S. (2002). The evaluation of bank branch performance using data envelopment analysis a framework. Journal of High Technology Management Research, 13, 1-17.
Mecit E. D. and Alp I. (2012). A new restricted model using correlation coefficients as alternative to crossefficiency evaluation in data envelopment analysis. Hacettepe Journal of Mathematics and Statestics, 41(2):321-335.
Mohaghar, A., Hakkak, M. and Yaghoubi, H. (2014). Efficiency Evaluation of Foreign Currency Branches of Bank Keshavarzi of Iran Using Integrated BSC, DEA and AHP Approaches. International Journal of Industrial Engineering & Production Management, 25(2), 237-247.
Naini, S.G.J., Moini, A. and Rezaee, M.J. (2013). Nash bargaining game model for two parallel stages process evaluation with shared inputs. The International Journal of Advanced Manufacturing Technology, 67(1-4), 475-484.
Najafi, E., Aryanezhad, M. and Bakhshi Farkoush, S. (2011). A BSC-DEA approach to measure the relative efficiency of service industry: A case study of banking sector. International Journal of Industrial Engineering Computations, 2(2), 273-282.
Nakabayashi, K. and Tone, K. (2006). Egoist's dilemma: a DEA game. Omega, 34(2), 135-148.
Nash, J. F. (1950a). The bargaining problem. Economitrica, 18(2), 155-162.
Osborne, M. J. (2009). An Introduction to Game Theory, Oxford University Press.
Rezaee, M.J., Moini, A. and Asgari, F.H.A. (2012). Unified performance evaluation of health centers with integrated model of data envelopment analysis and bargaining game. Journal of medical systems, 36(6), 3805-3815.
Rezaee, M.J., Moini, A. and Makui, A. (2012). Operational and non-operational performance evaluation of thermal power plants in Iran: A game theory approach. Energy, 38(1), 96-103.
Rezaee, M.J. (2015). Using Shapley value in multi-objective data envelopment analysis: power plants evaluation with multiple frontiers. International Journal of Electrical Power & Energy Systems, 69, 141-149.
Safari, N., Zarghami, M. and Szidarovszky, F. (2014). Nash bargaining and leader–follower models in water allocation: Application to the Zarrinehrud River basin, Iran. Applied Mathematical Modelling, 38(7-8), 1959-1968.
Sexton, T.R., Silkman, R.H. and Hogan, A.J. (1986). Data envelopment analysis: Critique and extensions. New Directions for Program Evaluation, 1986(32), 73-105.
Shahroodi, K. and Bahraloloom, S.A. (2014). Evaluating the efficiency of banking industry by DEA: Balanced approach. Jahad Publish.
Sharma, R.S. and Bhattacharya, S. (2013). Knowledge dilemmas within organizations: Resolutions from game theory. Knowledge-Based System 45, 100-113.
Tchangani, A.P. (2006). A satisficing game theory approach for group evaluation of production units. Decision Support Systems, 42(2), 778-788.
Wang, Y.M. and Chin, K.S. (2010). Some alternative models for DEA cross-efficiency evaluation. International Journal of Production Economics, 128(1), 332-338.
Wu, H.Y. (2012). Constructing a strategy map for banking institutions with key performance indices of the balanced scorecard. Evaluation and program planning, 35(3), 303-320.
Wu, J., Chu, J., Sun, J. and Zhu, Q. (2016). DEA cross-efficiency evaluation based on Pareto improvement. European Journal of Operational Research, 248(2), 571-579.
Wu, J., Liang, L., Yang, F. and Yan, H. (2009). Bargaining game model in the evaluation of decision making units. Expert Systems with Applications, 36 (3), 4357–4362.
Yang, C. and Liu, H. M. (2012). Managerial efficiency in Taiwan bank branches: A network DEA. Economic Modelling, 29(2), 450-461.
Yang, X. and Morita, H. (2013). Efficiency improvement from multiple perspectives: An application to Japanese banking industry. Omega, 41(3), 501-509.
Zhou, Z., Sun, L., Yang, W., Liu, W. and Ma, C. (2013). A bargaining game model for efficiency decomposition in the centralized model of two-stage systems. Computers & Industrial Engineering, 64(1), 103-108.
Journal of Quality Engineering and Production Optimization
Volume 7, Issue 1
May 2022
Pages 75-97

Files

Share

How to cite

Statistics