New answers tagged pareto-efficiency
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Finding the Pareto efficient allocations
Let $y_i$ be the contribution of agent i towards the production of $y$
$y=\sqrt{\sum y_i}$
So when $y=4$
$\Rightarrow \sum y_i=16 \Rightarrow \sum x_i = 14$
The set of pareto efficient allocations is $...
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Pareto Improvement with Monopolies
Most of the discussion on Pareto optimum misses the very basis of the model. It is simply a model describing how a set of producers and consumers moves to an equilibrium in a given market situation.
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Reason behind Pareto principle
A starting point to understand physics is that is science built on experiments and models. Newton drops an apple and watches it fall. From this he created a model -- the so called Newton laws are ...
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I know that pareto optimal does not mean equitable, but is an equitable distribution also pareto optimal?
Sometimes Pareto optimal distribution can be equitable but this is not often seen naturally.
In any case when government has to redistribute resources around using distortionary taxes in order to ...
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