The accounting and management literature reflects an increasing interest in relative performance evaluation (RPE) measures, often called ‘benchmarking’. In this paper we illustrate how stochastic frontier estimation (SFE) can be used to estimate benchmark performance standards which control for differences in the environments of the benchmarked operating units. Our application of SFE uses cross-sectional data reported by school districts in the state of Missouri for the year 1990–1991. The results suggest that the districts may have had as much as $394 million of excess expenditures in their operations.

This study uses experimental methods to assess how different legal regimes affect the frequency and amounts of settlements in a three person setting (one plaintiff and two defendants). The four legal regimes investigated differ along two dimensions: (1) allocation of liability, either ‘joint and several’ or proportionate liability, and (2) liability mappings, either unconditional or conditional mappings. We find that the lowest settlement frequencies occur in regimes with joint and several allocation rules. In addition, joint and several rules have the most adverse effects on the defendants' wealth.