Pareto efficiency, or Pareto optimality, is a state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off. The term is named after Vilfredo Pareto (1848–1923), an Italian economist who used the concept in his studies of economic efficiency and income distribution. The concept has applications in academic fields such as economics and engineering. For example, suppose there are two consumers A & B and only one resource X. Suppose X is equal to 20. Let us assume that the resource has to be distributed equally between A and B and thus can be distributed in the following way: (1,1), (2,2), (3,3), (4,4), (5,5), (6,6), (7,7), (8,8), (9,9), (10,10). Pareto efficiency in short A production-possibility frontier is an example of a Pareto Efficient Frontier, or Pareto-Optimal Front. It is commonly accepted[by whom?] In real-world practice, such compensations have unintended consequences.
Related: Win-Win Conflict Resolution & Game Theory
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