Pareto Efficiency is an economic situation where property is allocated in the most proficient approach. Pareto efficiency is obtained when a allocation approach exists where one party’s condition cannot be improved without making another party’s condition inferior. Pareto efficiency has wide implications in economics, mainly in game theory. Unlike the predict logical outcome of a prisoner’s dilemma, if an economic condition is Pareto efficient, individuals are maximizing their effectiveness.
Pareto Efficiency
