Learn Before
Pareto Incomparability of (I, I) and (T, I) Allocations in the Pest Control Game
The Pareto criterion cannot be used to rank the (I, I) and (T, I) allocations in the pest control game. This is because moving from the (T, I) allocation, with payoffs (4, 1), to the (I, I) allocation, with payoffs (3, 3), would make Anil worse off as his payoff decreases from 4 to 3. Conversely, moving from (I, I) to (T, I) would make Bala worse off, as her payoff decreases from 3 to 1. Since any move between these two states harms one of the players, neither allocation Pareto-dominates the other. The text suggests that while one might find other reasons to prefer one allocation, the Pareto criterion itself cannot rank them.
0
1
Tags
Social Science
Empirical Science
Science
Economy
Economics
CORE Econ
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.4 Strategic interactions and social dilemmas - The Economy 2.0 Microeconomics @ CORE Econ
Related
Pareto Incomparability of (I, I) and (T, I) Allocations in the Pest Control Game
Pareto Dominance
Vilfredo Pareto
Two roommates, Sam and Pat, are deciding on a new apartment layout. The table below shows four possible layouts (A, B, C, D) and the level of satisfaction each roommate would get from them, represented by a number. According to the principle that an allocation is an improvement over another only if at least one person is made better off and no one is made worse off, which of the following statements is true?
Layout Sam's Satisfaction Pat's Satisfaction A 5 5 B 7 4 C 6 5 D 8 8 City Policy Decision Analysis
Comparing Economic Policies
A proposed city project will build a new public park. This project increases the property values and well-being for 1,000 residents. However, to build the park, one resident's home must be acquired by the city, and while they are compensated, they consider themselves slightly worse off because they have to move. According to the principle that an outcome is an improvement only if at least one person is better off and no one is worse off, this project is considered an improvement.
An economic advisor is evaluating four proposed policy changes from the current situation. Match each policy outcome to the correct classification according to the principle that a new situation is an improvement only if at least one person is made better off and no one is made worse off.
Two individuals are considering four possible outcomes, labeled A, B, C, and D. The table below shows the utility each individual receives from each outcome. Using the criterion that one outcome is an improvement over another only if at least one person is made better off and no one is made worse off, which pair of outcomes cannot be ranked relative to each other?
Critique of a Decision-Making Criterion
Project Management Methodology Choice
Evaluating a Resource Reallocation
Limitations of the Pareto Criterion
Corporate Software Implementation Analysis
A proposed city project will build a new public park. This project increases the property values and well-being for 1,000 residents. However, to build the park, one resident's home must be acquired by the city, and while they are compensated, they consider themselves slightly worse off because they have to move. According to the principle that an outcome is an improvement only if at least one person is better off and no one is worse off, this project is considered an improvement.
Learn After
Two individuals, Anil and Bala, are involved in a situation with two possible outcomes. The payoffs for each outcome are listed as (Anil's payoff, Bala's payoff).
- Outcome X: (4, 1)
- Outcome Y: (3, 3)
Using the principle that one outcome is superior to another only if at least one person is made better off and no one is made worse off, analyze the relationship between Outcome X and Outcome Y.
Evaluating Economic Outcomes
Consider two possible outcomes for a pair of individuals, Person 1 and Person 2. The payoffs are represented as (Person 1's payoff, Person 2's payoff). Outcome A has payoffs of (4, 1) and Outcome B has payoffs of (3, 3). According to the principle that an allocation is superior to another only if it makes at least one person better off without making anyone worse off, Outcome B is superior to Outcome A.
Policy Choice Evaluation
Consider a situation involving two people, Person 1 and Person 2. The outcomes are represented by payoff pairs (Person 1's payoff, Person 2's payoff). For each set of two possible outcomes listed below, match it to the correct description of their relationship based on the principle that an allocation is superior to another only if it makes at least one person better off without making anyone worse off.
Critique of a Policy Decision
Two economic policies are being evaluated based on their impact on two distinct groups in a community, Group 1 and Group 2. The outcomes are measured in units of welfare and represented as (Group 1's outcome, Group 2's outcome).
- Policy X: (10, 2)
- Policy Y: (8, 8)
A policy analyst concludes that based only on the principle that an allocation is superior to another if it makes at least one group better off without making any group worse off, neither policy can be judged as superior to the other. Which statement best explains the reasoning for this conclusion?
Modifying Economic Outcomes for Superiority
Evaluating Business Strategies
Evaluating a Consultant's Recommendation