Frontier estimation appears in productivity analysis. Firm’s performance is measured by the distance between its output and an optimal production frontier. Frontier estimation becomes difficult if outputs are measured with noise and most approaches rely on restrictive parametric assumptions....

“The quiet life hypothesis” (QLH) by Hicks (1935) argues that, due to management’s subjective cost of reaching optimal profits, firms use their market power to allow inefficient allocation of resources. Increasing competitive pressure is therefore likely to force management to work harder...