What is Pareto?
1.
Pareto efficiency is enforcing something that makes somebody better off without making anybody else worse off. Net society gains as a whole.
It's like 2 guys chasing 2 girls (a blonde and a brounette). Guy 1 only likes blondes. Guy 2 only likes brounettes.
Outcomes:
Guy 1 gets both girls. Guy 2 no girl.
Guy 2 gets both girls. Guy 1 no girl.
OR,
PARETO EFFICENT OUTCOME:
Guy 1 gets the blonde, and Guy 2 gets the brounette. Each is made better off without making the other guy worse off.
See
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