# SPNE and Pareto Optimality

• "The SPNE of a sequential game might not necessarily be Pareto Optimal"

I understand the definitons of Nash Equilibria and Pareto Optimality and that these are not synonymous concepts. An example in reference to this question would be a Firm-Union Wage Setting Game, in which there might be $$w$$ offers which provide greater payoffs to both the firm and union. Please share some other examples for the same. Thanks!

• Perhaps this might help: In layman terms, a Pareto optimal point is the solution of an optimization problem. On the other hand, Nash equilibrium is a fixed point. Apr 7, 2019 at 17:09