Pareto efficiency
A concept often invoked in the economic analysis of law; it was first described by the Italian economist Vilfredo Pareto (1848–1923). An alteration in the allocation of resources is Pareto efficient when it leaves at least one person better off than he was prior to the change and nobody worse off. A state of Pareto optimality occurs when no further improvements can be made without one party becoming a loser. Compare Kaldor-Hicks efficiency; Coase theorem. |