Pareto efficiency
Sign in to saveAlso known as Pareto optimality, Pareto criterion, Pareto-optimal, Pareto-efficient
economic concept of a state in which no reallocation of resources can make everyone at least as well off
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In welfare economics, a Pareto improvement formalizes the idea of an outcome being "better in every possible way". A change is called a Pareto improvement if it leaves at least one person in society better off without leaving anyone else worse off than they were before. A situation is called Pareto efficient or Pareto optimal if all possible Pareto improvements have already been made; in other words, there are no longer any ways left to make one person better off without making some other person worse off.
In social choice theory, the same concept is sometimes called the unanimity principle, which says that if everyone in a society (non-strictly) prefers A to B, society as a whole also non-strictly prefers A to B. The Pareto front consists of all Pareto-efficient situations.