Threory of pareto optimality?

Question

asses the theory of pareto optimality in the distribution of public and private goods

Answer 1

http://en.wikipedia.org/wiki/Pareto_opti...

http://people.hofstra.edu/geotrans/eng/c...

Quote:

Pareto optimality, named after Italian economist Vilfredo Pareto (1906), is a measure of efficiency in multi-criteria and multi-party situations. The concept has wide applicability in economics, game theory, multicriteria optimization, multicriteria decision-making, and the social sciences generally. Multicriteria problems are those in which there are two or more criteria measured in different units (“apples and oranges”), and no agreed-upon conversion factor exists to convert all criteria into a single metric.

For the purposes of this road-corridor exercise, a solution can be considered Pareto optimal if there is no other solution that performs at least as well on every criteria and strictly better on at least one criteria. That is, a Pareto-optimal solution cannot be improved upon without hurting at least one of the criteria. Solutions that are Pareto-optimal are also known in various literatures as nondominated, noninferior, or Pareto-efficient. A solution is not Pareto-optimal if one criteria can be improved without degrading any others. These solutions are known as dominated or inferior solutions.

Pareto optimality can be visualized in a scatterplot of solutions (see above figure). Each criteria (or objective function) is graphed on a separate axis. It is easy to visualize in a problem with only two criteria, but much more difficult with three or more criteria. In a problem with two criteria, both of which are to be minimized (as in the road corridor problem, for which lower costs and environmental impacts are better), Pareto-optimal solutions are those in the scatterplot with no points down and to the left of them. Dominated solutions are those with at least one point down and to the left of them.

http://en.wikipedia.org/wiki/Constrained...

http://www.envisionsoftware.com/articles...