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Pareto efficiency

Index Pareto efficiency

Pareto efficiency or Pareto optimality is a state of allocation of resources from which it is impossible to reallocate so as to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off. [1]

62 relations: Admissible decision rule, Adverse selection, Agent (economics), Algorithm, Amartya Sen, Arrow's impossibility theorem, Bayesian efficiency, Categorical distribution, Compact space, Compensation principle, Competitive equilibrium, Computer science, Deadweight loss, Decision theory, Economic efficiency, Economics, Engineering, Externality, Free market, Fundamental theorems of welfare economics, Game theory, Gérard Debreu, Goods, Government failure, Highest and best use, Income distribution, Kaldor–Hicks efficiency, Kenneth Arrow, Lagrangian mechanics, Liberal paradox, Lindahl tax, List of life sciences, Local nonsatiation, Lump sum, Market failure, Maximal and minimal elements, Metric space, Moral hazard, Multi-objective optimization, Nash equilibrium, Normative, Order theory, Perfect information, Quarterly Journal of Political Science, Resource allocation, Ricardian equivalence, Robinson Crusoe economy, Skyline operator, Social Choice and Individual Values, Social choice theory, ..., Social equality, Status quo, Trade-off, Trade-off talking rational economic person, Unintended consequences, University of Queensland, Utility, Vector space, Vilfredo Pareto, Wealth concentration, Welfare economics, Zero-sum game. Expand index (12 more) »

Admissible decision rule

In statistical decision theory, an admissible decision rule is a rule for making a decision such that there is not any other rule that is always "better" than it (or at least sometimes better and never worse), in the precise sense of "better" defined below.

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Adverse selection

Adverse selection is a term commonly used in economics, insurance, and risk management that describes a situation where market participation is affected by asymmetric information.

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Agent (economics)

In economics, an agent is an actor and more specifically a decision maker in a model of some aspect of the economy.

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In mathematics and computer science, an algorithm is an unambiguous specification of how to solve a class of problems.

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Amartya Sen

Amartya Kumar Sen, CH, FBA (born 3 November 1933) is an Indian economist and philosopher, who since 1972 has taught and worked in India, the United Kingdom, and the United States.

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Arrow's impossibility theorem

In social choice theory, Arrow's impossibility theorem, the general possibility theorem or Arrow's paradox is an impossibility theorem stating that when voters have three or more distinct alternatives (options), no ranked voting electoral system can convert the ranked preferences of individuals into a community-wide (complete and transitive) ranking while also meeting a specified set of criteria: unrestricted domain, non-dictatorship, Pareto efficiency and independence of irrelevant alternatives.

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Bayesian efficiency

Bayesian efficiency is an analog of Pareto efficiency for situations in which there is incomplete information.

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Categorical distribution

In probability theory and statistics, a categorical distribution (also called a generalized Bernoulli distribution, multinoulli distribution) is a discrete probability distribution that describes the possible results of a random variable that can take on one of K possible categories, with the probability of each category separately specified.

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Compact space

In mathematics, and more specifically in general topology, compactness is a property that generalizes the notion of a subset of Euclidean space being closed (that is, containing all its limit points) and bounded (that is, having all its points lie within some fixed distance of each other).

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Compensation principle

In welfare economics, the compensation principle refers to a decision rule used to select between pairs of alternative feasible social states.

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Competitive equilibrium

Competitive equilibrium (also called: Walrasian equilibrium) is the traditional concept of economic equilibrium, appropriate for the analysis of commodity markets with flexible prices and many traders, and serving as the benchmark of efficiency in economic analysis.

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Computer science

Computer science deals with the theoretical foundations of information and computation, together with practical techniques for the implementation and application of these foundations.

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Deadweight loss

A deadweight loss, also known as excess burden or allocative inefficiency, is a loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved.

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Decision theory

Decision theory (or the theory of choice) is the study of the reasoning underlying an agent's choices.

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Economic efficiency

Economic efficiency is, roughly speaking, a situation in which nothing can be improved without something else being hurt.

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Economics is the social science that studies the production, distribution, and consumption of goods and services.

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Engineering is the creative application of science, mathematical methods, and empirical evidence to the innovation, design, construction, operation and maintenance of structures, machines, materials, devices, systems, processes, and organizations.

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In economics, an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit.

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Free market

In economics, a free market is an idealized system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.

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Fundamental theorems of welfare economics

There are two fundamental theorems of welfare economics.

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Game theory

Game theory is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers".

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Gérard Debreu

Gérard Debreu (4 July 1921 – 31 December 2004) was a French-born American economist and mathematician.

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In economics, goods are materials that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product.

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Government failure

Government failure, in the context of public economics, is an economic inefficiency caused by a government intervention, if the inefficiency would not exist in a true free market.

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Highest and best use

Highest and best use, or highest or best use (HBU), is a concept that originated with early economists such as Irving Fisher (1867-1947), who conceptualized the idea of maximum productivity.

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Income distribution

In economics, income distribution is how a nation’s total GDP is distributed amongst its population.

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Kaldor–Hicks efficiency

A Kaldor–Hicks improvement, named for Nicholas Kaldor and John Hicks, is an economic re-allocation of resources among people that captures some of the intuitive appeal of a Pareto improvement, but has less stringent criteria and is hence applicable to more circumstances.

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Kenneth Arrow

Kenneth Joseph "Ken" Arrow (23 August 1921 – 21 February 2017) was an American economist, mathematician, writer, and political theorist.

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Lagrangian mechanics

Lagrangian mechanics is a reformulation of classical mechanics, introduced by the Italian-French mathematician and astronomer Joseph-Louis Lagrange in 1788.

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Liberal paradox

The liberal paradox, also Sen paradox or Sen's paradox, is a logical paradox discovered by Amartya Sen which purports to show that no social system can simultaneously.

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Lindahl tax

A Lindahl tax is a form of taxation conceived by Erik Lindahl in which individuals pay for public goods according to their marginal benefits.

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List of life sciences

The life sciences or biological sciences comprise the branches of science that involve the scientific study of life and organisms – such as microorganisms, plants, and animals including human beings – as well as related considerations like bioethics.

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Local nonsatiation

The property of local nonsatiation of consumer preferences states that for any bundle of goods there is always another bundle of goods arbitrarily close that is preferred to it.

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Lump sum

A lump sum is a single payment of money, as opposed to a series of payments made over time (such as an annuity).

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Market failure

In economics, market failure is a situation in which the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

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Maximal and minimal elements

In mathematics, especially in order theory, a maximal element of a subset S of some partially ordered set (poset) is an element of S that is not smaller than any other element in S. A minimal element of a subset S of some partially ordered set is defined dually as an element of S that is not greater than any other element in S. The notions of maximal and minimal elements are weaker than those of greatest element and least element which are also known, respectively, as maximum and minimum.

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Metric space

In mathematics, a metric space is a set for which distances between all members of the set are defined.

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Moral hazard

In economics, moral hazard occurs when someone increases their exposure to risk when insured.

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Multi-objective optimization

Multi-objective optimization (also known as multi-objective programming, vector optimization, multicriteria optimization, multiattribute optimization or Pareto optimization) is an area of multiple criteria decision making, that is concerned with mathematical optimization problems involving more than one objective function to be optimized simultaneously.

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Nash equilibrium

In game theory, the Nash equilibrium, named after American mathematician John Forbes Nash Jr., is a solution concept of a non-cooperative game involving two or more players in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only their own strategy.

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Normative generally means relating to an evaluative standard.

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Order theory

Order theory is a branch of mathematics which investigates the intuitive notion of order using binary relations.

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Perfect information

In economics, perfect information is a feature of perfect competition.

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Quarterly Journal of Political Science

Quarterly Journal of Political Science is a quarterly peer-reviewed academic journal which began in 2006.

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Resource allocation

In economics, resource allocation is the assignment of available resources to various uses.

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Ricardian equivalence

The Ricardian equivalence proposition (also known as the Ricardo–de Viti–Barro equivalence theorem) is an economic hypothesis holding that consumers are forward looking and so internalize the government's budget constraint when making their consumption decisions.

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Robinson Crusoe economy

A Robinson Crusoe economy is a simple framework used to study some fundamental issues in economics.

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Skyline operator

The Skyline operator is an optimization problem used in a query to filter results from a database to keep only those objects that are not worse than any other.

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Social Choice and Individual Values

Kenneth Arrow's monograph Social Choice and Individual Values (1951, 2nd ed., 1963) and a theorem within it created modern social choice theory, a rigorous melding of social ethics and voting theory with an economic flavor.

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Social choice theory

Social choice theory or social choice is a theoretical framework for analysis of combining individual opinions, preferences, interests, or welfares to reach a collective decision or social welfare in some sense.

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Social equality

Social equality is a state of affairs in which all people within a specific society or isolated group have the same status in certain respects, including civil rights, freedom of speech, property rights and equal access to certain social goods and services.

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Status quo

Status quo is a Latin phrase meaning the existing state of affairs, particularly with regard to social or political issues.

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A trade-off (or tradeoff) is a situational decision that involves diminishing or losing one quality, quantity or property of a set or design in return for gains in other aspects.

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Trade-off talking rational economic person

Trade-off talking rational economic person (TOTREP) is one term, among various, used to denote, in the field of choice analysis, the rational, human agent of economic decisions.

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Unintended consequences

In the social sciences, unintended consequences (sometimes unanticipated consequences or unforeseen consequences) are outcomes that are not the ones foreseen and intended by a purposeful action.

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University of Queensland

The University of Queensland (UQ) is a public research university primarily located in Queensland's capital city, Brisbane, Australia.

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Within economics the concept of utility is used to model worth or value, but its usage has evolved significantly over time.

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Vector space

A vector space (also called a linear space) is a collection of objects called vectors, which may be added together and multiplied ("scaled") by numbers, called scalars.

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Vilfredo Pareto

Vilfredo Federico Damaso Pareto (born Wilfried Fritz Pareto, 15 July 1848 – 19 August 1923) was an Italian engineer, sociologist, economist, political scientist, and philosopher, now also known for the 80/20 rule, named after him as the Pareto principle.

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Wealth concentration

Wealth concentration is a process by which created wealth, under some conditions, can become concentrated by individuals or entities.

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Welfare economics

Welfare economics is a branch of economics that uses microeconomic techniques to evaluate well-being (welfare) at the aggregate (economy-wide) level.

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Zero-sum game

In game theory and economic theory, a zero-sum game is a mathematical representation of a situation in which each participant's gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants.

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[1] https://en.wikipedia.org/wiki/Pareto_efficiency

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