Pareto Efficient

A change (such as a transaction) is ParetoEfficient if at least one person is better off, and if no person is worse off; this is known as a ParetoImprovement?.

If a situation allows no ParetoEfficient change, it is said to be ParetoOptimal.


A transaction is ParetoEfficient if the gainers' gain is at least enough to compensate the losers for their loss, and the losers in fact receive the compensation.

If a transaction would be ParetoEfficient via compensation, but the compensation doesn't occur, then it's KaldorHicksEfficient?.


CategoryEconomics


EditText of this page (last edited July 21, 2004) or FindPage with title or text search