What is Pareto efficiency? Why do economists use this criterion for comparing alternative economic systems?© BrainMass Inc. brainmass.com October 9, 2019, 5:21 pm ad1c9bdddf
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I found a typical definition of Pareto Efficiency from Wikipedia, I have summarized for you below, if you want to see the whole explanation, refer to the word document below.
"Pareto efficiency, or Pareto optimality, is a central theory in economics with broad applications in game theory, engineering and the social sciences.
Given a set of alternative allocations and a set of individuals, a movement from one alternative allocation to another that can make at least one individual better off, without making any other individual worse off is called a Pareto improvement or Pareto optimization. An allocation of resources is Pareto efficient or Pareto optimal when no further Pareto improvements can be made.
Thus in a Pareto Efficient outcome, we cannot make any person better off without ...
The 556 word solution presents a good summary of the term and how it is used. The response also provides a good resource with a fuller explanation.