The dual form of this concept was introduced by David Luenberger. In incomplete markets, a constrained version of this concept is used instead. The Scitovsky paradox results when this concept is extended using a compensation principle. In an Edgeworth Box, this condition occurs when the marginal rates of substitution are identical, which happens along a contract curve. This condition is equivalent to Walrasian equilibrium
The dual form of this concept was introduced by David Luenberger. In incomplete markets, a constrained version of this concept is used instead. The Scitovsky paradox results when this concept is extended using a compensation principle. In an Edgeworth Box, this condition occurs when the marginal rates of substitution are identical, which happens along a contract curve. This condition is equivalent to Walrasian equilibrium according to the fundamental theorems of welfare economics. Kaldor and Hicks extended this concept to situations where a redistribution of wealth could result in greater total utility. For 10 points, name this term for an allocation in which no person can be made better off without making another worse off, named for an Italian economist.