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THE PARETO PRINCIPLE OF OPTIMAL INEQUALITY *
Author(s) -
Bommier Antoine,
Zuber Stéphane
Publication year - 2012
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2012.00693.x
Subject(s) - pareto principle , variety (cybernetics) , mathematical economics , inequity aversion , economics , inequality , value (mathematics) , pareto optimal , mathematics , mathematical optimization , multi objective optimization , statistics , operations management , mathematical analysis
The Pareto principle is often viewed as a mild requirement compatible with a variety of value judgments. In particular, it is generally thought that it can accommodate different degrees of inequality aversion. We show that this is generally not true in time‐consistent intertemporal models where some uncertainty prevails.