Applying Preferred Information of the Decision Maker with Production Trade-offs in the Process of Evaluating the Performance of Banks

One of the methods to apply preferred information of the decision maker (DM) in the process of evaluating the efficiency of banks is the method of production trade-offs in data envelopment analysis (DEA). In this paper, we propose a two stage network DEA framework for incorporating value-judgments in the form of production trade-offs to analyze the efficiency of banks. We obtain technical and cost efficiency from banks based on bank manager's opinion. We use the production trade-off method to consider the importance of each of the inputs, intermediate measure and outputs relative to each other to evaluate the performance of commercial banks. We show that by changing the production trade-offs matrix, the technical and cost efficiency scores of banks also change. We propose efficient targets for inefficient banks. At the end, we bring the results of the paper.