Difference between revisions of "Pareto Optimality"
From Critiques Of Libertarianism
| Line 5: | Line 5: | ||
A single market transaction results in a Pareto improvement for the two exchanging. But if this transaction is instead of a transaction with a third party, then there is a significant loss to the third party if they have produced with expectation of exchange. An economy of Pareto improving transactions can still have losers. Every company that ever went out of business due to competition in a market is an example of how nothing but Pareto improvements still creates losers as conditions shift. | A single market transaction results in a Pareto improvement for the two exchanging. But if this transaction is instead of a transaction with a third party, then there is a significant loss to the third party if they have produced with expectation of exchange. An economy of Pareto improving transactions can still have losers. Every company that ever went out of business due to competition in a market is an example of how nothing but Pareto improvements still creates losers as conditions shift. | ||
| + | |||
| + | Nor are the initial conditions of markets (property) Pareto efficient. | ||
<!-- DPL has problems with categories that have a single quote in them. Use these explicit workarounds. --> | <!-- DPL has problems with categories that have a single quote in them. Use these explicit workarounds. --> | ||
<!-- normally, we would use {{Links}} and {{Quotes}} --> | <!-- normally, we would use {{Links}} and {{Quotes}} --> | ||
