Kaldor-Hicks efficiency
economics
Also known as: potential Pareto-efficiency
Learn about this topic in these articles:
efficiency
- In efficiency
A system is called Kaldor-Hicks efficient if resources are put in the hands of those that value them the most, measured by whether one person could theoretically compensate another for the same resources at a cost that would be worth it to them but worth more than the traded…
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Pareto-optimality
- In Pareto-optimality
…potential Pareto-efficiency (also known as Kaldor-Hicks efficiency) is more discriminating and finds wider use in economics. According to that concept, a state of affairs x is inefficient if there is some alternative state of affairs y such that, in y, there is a set of possible lump-sum transfers of wealth…
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