Tag Archives | Pareto Optimality and Welfare Optimality

Learn about the comparison between Pareto optimality and welfare optimality. The Pareto optimality is necessary but not sufficient for welfare maximisation. We have seen that welfare maximisation occurs at some point on the GUPF where the GUPF is a tangent to an SIC. Therefore, since every point on the GUPF satisfies all the three conditions of Pareto optimality, Pareto optimality [...]