Pareto Efficiency, also known as Pareto Optimality, is a state in which resources are allocated in a way that no individual's situation can be improved without making someone else's situation worse. It is a fundamental concept in economics and game theory, used to evaluate the efficiency of resource distribution and social welfare outcomes.

Pareto Efficiency

Pareto Optimality refers to a state in resource allocation where it is impossible to make any individual better off without making at least one individual worse off. It is a fundamental concept in economics and game theory, highlighting efficiency but not necessarily equity in distribution of resources.

Pareto Optimality

Resource allocation is the strategic distribution of available assets to various projects or departments to optimize efficiency and achieve organizational goals. It involves decision-making processes to ensure that limited resources are used effectively to maximize output and minimize waste.

Resource Allocation

individual's situation

someone else's situation

fundamental concept

Economics is the study of how individuals, businesses, and governments make choices on allocating resources to satisfy their wants and needs, and how these choices interact to shape markets and economies. It encompasses both microeconomic and macroeconomic perspectives, analyzing everything from individual consumer behavior to global economic trends.

economics

Game theory is a mathematical framework used for analyzing strategic interactions where the outcome for each participant depends on the actions of all involved. It provides insights into competitive and cooperative behaviors in economics, politics, and beyond, helping to predict and explain decision-making processes in complex scenarios.

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