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Mathematics - Mathematical Economics and Finance

Mathematics - Mathematical Economics and Finance

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Published by Osaz Aiho Uhumuavbi

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Published by: Osaz Aiho Uhumuavbi on Mar 14, 2011
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01/17/2013

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Definition 4.8.1 A feasible allocation X = (x1,...,xH) is Pareto efficient if
there does not exist any
feasible way of reallocating the same initial aggregate
endowment,
H

h=1xh, which makes one individual better off without making any

other worse off.

Definition 4.8.2 X is Pareto dominated by X = (x 1,...,x H) if H

h=1xh =

H

h=1x h, x h h xhh andx h h xh for at least one h.

3

This material still exists only in handwritten form in Alan White’s EC3080 notes from 1991-
2. One thing missing from the handwritten notes is Kakutani’s Fixed Point Theorem which should
be quoted from ?.

Revised: December 2, 1998

CHAPTER 4. CHOICE UNDER CERTAINTY

79

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