Perhaps the central theme of economic theory, efficiency is concerned with the optimal allocation of scarce resources.
Efficiency is achieved when some specific criterion is maximized and no allocation of resources could yield a higher value
according to that criterion. Usually, efficiency measures, such as Pareto optimality and Hicks optimality,
attempt to maximize either individual or communal payoffs.
updated: 15 August 2005
HOW TO CITE THIS ENTRY
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- See news articles on normal-form games.