Vilfredo Pareto
(July 15, 1848 - August 19, 1923)




         Anais G. Duplan
Economic Theories
 Pareto’s Principle
 (The 80-20 Rule)

 Pareto Efficiency

 Ophelmity
 (As opposed to utility)

     ...
Pareto’s Principle
“where a large number of factors or
  agents contribute to a result, the
  majority (about 80 percent) ...
Pareto’s Principle
There are numerous applications:
   ~20% of the population owns ~80% of the
   nation’s wealth
   ~20...
Pareto Efficiency
A situation is Pareto efficient when “no
  one can be made better off without
  making someone else wors...
Pareto Efficiency
Pareto Efficiency can be graphically
  represented by a production possibilities
  frontier:

          ...
Ophelmity
It is widely held amongst economists
  that consumers will act in a way
  that increases their utility. Pareto,
...
Ophelmity
Pareto identified seven classes of sentiment
   that motivate people’s actions.
1. “Instinct for combinations”
2...
“Instinct for combinations”
This sentiment often characterizes
 people that are ‘progressive’ and
 promote social reform a...
“Preservation of
         aggregates”
This sentiment often characterizes
 people who promote the
 preservation of the stat...
“the need for expressing
 sentiments through external
           action”

Examples of external action are religious
  cere...
Maintenance of societal and
     communal structure

An example of this is self-sacrifice for the
 sake of family and comm...
Societies that stress individual
            integrity

These societies are characterized by
 criminal justice and civil l...
“The tendency to see social
    events in sexual terms”

This is self-explanatory.
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Vilfredo Pareto

  1. 1. Vilfredo Pareto (July 15, 1848 - August 19, 1923) Anais G. Duplan
  2. 2. Economic Theories  Pareto’s Principle (The 80-20 Rule)  Pareto Efficiency  Ophelmity (As opposed to utility) www.resourcesystemsconsulting.com/.../ Pareto.jpg
  3. 3. Pareto’s Principle “where a large number of factors or agents contribute to a result, the majority (about 80 percent) of the result is due to the contributions of a minority (about 20 percent) of factors or agents” “Pareto Principle.” Business Dictionary. Web. 27 Sept. 2009. <http://www.businessdictionary.com>
  4. 4. Pareto’s Principle There are numerous applications:  ~20% of the population owns ~80% of the nation’s wealth  ~20% of patrons account for ~80% of sales  ~20% of supplies provide for 80% of a company’s supplies Etc.
  5. 5. Pareto Efficiency A situation is Pareto efficient when “no one can be made better off without making someone else worse off.” Fonseca, Gonzalo L. “Vilfredo Pareto.” New School of Economics. Web. 27 Sept. 2009. <http://homepage.newschool.edu>
  6. 6. Pareto Efficiency Pareto Efficiency can be graphically represented by a production possibilities frontier: Points A, B and C are Pareto-efficient options. Point X is inefficient and point Y is impossible given current resources. wahyu.com/wp-content/ uploads/2009/01/ppf.gif
  7. 7. Ophelmity It is widely held amongst economists that consumers will act in a way that increases their utility. Pareto, suggests, however, that people act based on sentiment and not at all logically.
  8. 8. Ophelmity Pareto identified seven classes of sentiment that motivate people’s actions. 1. “Instinct for combinations” 2. “Preservation of aggregates” 3. “the need for expressing sentiments through external action” 4. Maintenance of societal and communal structure 5. Societies that stress individual integrity 6. “The tendency to see social events in sexual terms”
  9. 9. “Instinct for combinations” This sentiment often characterizes people that are ‘progressive’ and promote social reform and most importantly, change.
  10. 10. “Preservation of aggregates” This sentiment often characterizes people who promote the preservation of the status quo.
  11. 11. “the need for expressing sentiments through external action” Examples of external action are religious ceremonies and displays of patriotism.
  12. 12. Maintenance of societal and communal structure An example of this is self-sacrifice for the sake of family and community.
  13. 13. Societies that stress individual integrity These societies are characterized by criminal justice and civil law systems.
  14. 14. “The tendency to see social events in sexual terms” This is self-explanatory.
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