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questions :Pareto efficiency theorem
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[Member (365WT)]answers [Chinese ]Time :2018-11-22
Pareto efficiency

The most rigorous interpretation of the meaning of resource allocation was made by the Italian economist Philfredo Pareto (1848-1923). According to Pareto, if the allocation of social resources has reached such a state, if one wants to make a member of society better, it can only make the situation of some other member worse than now. That is, if you don’t let someone change, you can’t make anyone better, people do their best, and do their best.
use. Then, the status of this resource allocation is the best, and it is the most efficient. If this state is not achieved, that is, any re-adjustment will make someone's situation better, without making any other person's situation worse, then the situation of this resource allocation is not optimal and inefficient. This is the famous "Pareto efficiency" criterion.

Therefore, the Pareto states of different series cannot be compared.

Therefore, Pareto optimality may mean unfair distribution of income. Extremely, one person gets all the income, and the other has nothing. It is also the Pareto optimal state.
Pareto efficiency, also known as Pareto optimal, Pareto improvement, is an important concept in game theory and is widely used in economics, engineering and social sciences. Pareto's optimal state is that there is no room for more Pareto improvement; in other words, Pareto improvement is the path and method to achieve Pareto optimality.

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