The Pareto Optimality:
This efficiency criterion was developed by Vilfredo Pareto in his book “Manual of Political Economy”, 1906. An allocation of goods is Pareto optimal when there is no possibility of redistribution in a way where at least one individual would be better off while no other individual ends up worse off.
A state of affairs is Pareto-optimal (or Pareto-efficient) if and only if there is no alternative state that would make some people better off without making anyone worse off. More precisely, a state of affairs x is said to be Pareto-inefficient (or suboptimal) if and only if there is some state of affairs y such that no one strictly prefers x to y and at least one person strictly prefers y to x. The concept of Pareto-optimality thus assumes that anyone would prefer an option that is cheaper, more efficient, or more reliable or that otherwise comparatively improves one’s condition.
Hi.,
The 80/20 rule, also known as the Pareto Principle, is attributed to the Italian economist, Vilfredo Pareto. ... Applying it to the business world, the 80/20 rule suggests that 80% of your company sales come from 20% of your customers.
For example, he observed that 80% of the peas in his garden came from 20% of his pea plants. The 80:20 ratio of cause-to-effect became known as the Pareto Principle. Pareto principle is a prediction that 80% of effects come from 20% of causes. The pareto principle has become a popular business maxim..
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I congratulate you on choosing this important author as a subject for discussion. Pareto was however more important through his world famous work on political, economic and cultural elites. This subject is of main interest especially in the West.
Mr, Bertil Haggman, LL.M., author
Director, Center for Research on Geopolitics, Sweden
Originally, the Pareto Principle referred to the observation that 80% of Italy’s wealth belonged to only 20% of the population. More generally, the Pareto Principle is the observation (not law) that most things in life are not distributed evenly. It can mean all of the following things:
- 20% of the input creates 80% of the result
- 20% of the workers produce 80% of the result
- 20% of the customers create 80% of the revenue
- 20% of the bugs cause 80% of the crashes
- 20% of the features cause 80% of the usage
- And on and on…
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