joeteicher comments on The Second Best - Less Wrong

13 Post author: Wei_Dai 26 July 2009 10:58PM

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Comment author: [deleted] 31 July 2009 06:38:59PM 0 points [-]

A pretty key aspect of pareto-efficiency is that there are no interpersonal utility comparisons. A pareto-improvement is an improvement that makes at least one person better off (by their own standards) while making no one worse of (by their own standards). Even if a trade makes one person much, much better of and another person only a tiny bit worse off, that is not a pareto-improvement. Any situation like that can usually be made into a pareto-improvement by having the person who is made much better off give some enough money to the person who is made worse off that they are no longer made worse off.

Comment author: Vichy 08 August 2009 07:25:23AM 0 points [-]

Whether something is a 'cost' or a 'benefit' is itself entirely subjective.