Pareto Dominance

Definition ∞ Pareto dominance describes a situation where one allocation of resources or outcomes is superior to another if it makes at least one individual better off without making any other individual worse off. If a state is Pareto dominant over another, it represents an improvement in collective well-being. This concept is used to evaluate the efficiency of resource distribution. It indicates a clear enhancement without compromise.
Context ∞ Pareto dominance is a concept frequently applied in evaluating the efficiency of resource distribution and policy outcomes within decentralized networks. A key discussion involves identifying system upgrades or protocol changes that achieve Pareto improvements for network participants. Future developments focus on designing blockchain mechanisms that systematically move towards Pareto efficient states, enhancing overall system utility.