We extend the non-parametric methodology for empirical production analysis to deal with endogenous prices. As price endogeneity is often complemented by price uncertainty, we consider both the case of certain prices and the case of uncertain prices. The extensions are fully compatible with existing tools for eliciting and representing technology and price information, and preserves the tractable mathematical programming structure of the original methodology. An empirical application to the Dutch electricity distribution sector illustrates our extension.
Cherchye, L., Kuosmanen, T., & Post, G. T. (2002). Non-parametric Production Analysis in Non-Competitive Environments. International Journal of Production Economics, 80(3), 279-294. https://doi.org/10.1016/S0925-5273(02)00261-X