Concept of Pareto optimum

Résumé du document

Many possible states of society are also Pareto optima. The concept of Pareto optimum does not allow to compare : to see which are the most accurate or desirable, it is necessary to use other evaluation criteria, qualitative or quantitative terms.
For this reason, a situation optimality " Pareto " is not necessarily a situation socially " right." To take an extreme example, a society where all the wealth belongs to one man is a Pareto optimum, because transfer some of its wealth to others reduce the welfare of at least one individual.

Moreover, in this situation, it becomes possible to make changes that would increase the total stock of wealth of society without removing capital to this man, then the situation is not Pareto -optimal. Also in this same situation, assign a capital increase in the company to this man only ( instead of attributing it to those who have nothing ) recreates a Pareto optimum.

It is therefore necessary to employ a strict terminology and talk about effective state " Pareto ". A Pareto optimum is a minimal notion of efficiency measurement ; it can in some cases give an indication of the general direction of action, or to avoid making serious mistakes.

Extraits

[...] More colorfully, simply equating the welfare of a worker to the amount of his pay, and the total sum of these amounts happiness Pay all workers 10 euros more leads to a more efficient state, whether Pareto or utilitarian; and this will probably not unhappy. Pay 100 euros less 10% of workers and 15 euros more remaining 90% leads to a more efficient state utilitarian sense (for 15 90 > 100 but it will probably upset. This new state is incomparable Pareto with the previous one. [...]

[...] Pareto optimal and desirable state Many possible states of society are also Pareto optima. The concept of Pareto optimum does not allow to compare : to see which are the most accurate or desirable, it is necessary to use other evaluation criteria, qualitative or quantitative terms. For this reason, a situation optimality " Pareto " is not necessarily a situation socially " right." To take an extreme example, a society where all the wealth belongs to one man is a Pareto optimum, because transfer some of its wealth to others reduce the welfare of at least one individual. [...]

[...] Pareto and utilitarian criterion In this, the concept of Pareto optimum is to distinguish the utilitarian criterion of comparison of the possible states of society. The latter, also called the principle of the greatest happiness, indeed takes into account the " overall happiness " of society, designed as a comprehensive measure of well-being of all individuals, and declares a state of society is morally preferable to another if its overall happiness is greater than the overall happiness in the second state of society. [...]

[...] This is the benchmark to achieve in the neoclassical, although here again, the non- uniqueness of this balance makes necessary the use of external criteria (value placed on a particular aspect of society ) to decide what balance is preferable. Bibliography Alexis Jacquemin and Henry Tulkens, Foundations of Economics, De Boeck, Brussels, 2nd edition p. 213-215. [...]

[...] Definition The concept of Pareto optimum can halve the set of possible states of society. We can distinguish : those who are uniformly improvable : it is possible to increase the well- being of individuals without reducing that of others. those who are not uniformly improvable : increasing the well-being of individuals involves reducing the welfare of at least one other individual. These are the statements included in this second case that is referred to as Pareto optimal or Pareto -optimal. [...]