Kaplow on Pareto

The Pareto Principle — the idea that a solution is preferred if it makes some people better off and makes no one worse off — has played a significant role in scholarship about contract law.  In Pareto Principle and Competing Principles, forthcoming in the second edition of The New Palgrave Dictionary of Economics and the Law, Harvard’s Louis Kaplow argues that sometimes this just isn’t so.  Here’s the abstract:

The Pareto principle, the seemingly incontrovertible dictum that if all individuals prefer some regime to another then so should society, may conflict with competing principles. Arrow’s impossibility theorem and Sen’s liberal paradox are two notable examples. Subsequent work indicates more broadly that the Pareto principle conflicts with all non-welfarist principles. This essay surveys these results, including various extensions thereof, and offers perspectives on the conflict, drawing on classical and contemporary work in political economy and economic psychology.

[Frank Snyder]