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The Pareto Principle Of Optimal Inequality

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  • Antoine Bommier
  • Stéphane Zuber

Abstract

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.

Suggested Citation

  • Antoine Bommier & Stéphane Zuber, 2012. "The Pareto Principle Of Optimal Inequality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 593-608, May.
  • Handle: RePEc:wly:iecrev:v:53:y:2012:i:2:p:593-608
    DOI: 10.1111/j.1468-2354.2012.00693.x
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    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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