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In [[game theory]] and [[economics]], the concept of '''Pareto efficiency''' (or '''Pareto optimality''') is a method to judge the [[efficiency]] of a set of decisions made by the participants. It was named after [[Vilfredo Pareto]].
In [[game theory]] and [[economics]], the concept of '''Pareto efficiency''' (or '''Pareto optimality''') is a method to judge the [[efficiency]] of a set of decisions made by the participants. It was named after [[Vilfredo Pareto]]. Paretto eficiency is different from and should not be confused with [[Nash equilibrium]].
A set of decisions "x/y" (meaning that participant A chooses "x" while participant B chooses "y") is called Pareto optimal if there is '''no''' other state in which:
A set of decisions "x/y" (meaning that participant A chooses "x" while participant B chooses "y") is called Pareto optimal if there is '''no''' other state in which: