X-efficiency (1966)
Formulated by American economist HARVEY LEIBENSTEIN (1922-1993), x-efficiency describes the general efficiency of a firm (judged on managerial and technological criteria) in transforming inputs at minimum cost into maximum profits. Also see: theory of the firm, managerial theories of the firm, satisficing, agency theory, scalar principle, parkinson’s law Source: H Leibenstein, ‘Allocative Efficiency vs “X-efficiency”‘, American Economic Review,