this post was submitted on 20 Aug 2023
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I’m trying to understand what this means. I know the Pareto Principle from two contexts:
Because of the latter context, I’ve spent a fair amount of time trying to make this “principle” measurable and rigorous in a real business context and it’s just a fool’s errand. If you start out with a conclusion, it’s easy to map the 80/20 rule onto preexisting data, but trying to actually use it to create predictive models, I found it useless.
The Pareto principle is an economics idea - something is considered Pareto efficient if you can make someone better off without making someone else worse off, and you are at a Pareto optimum when you can't make anyone better off without making someone worse off. Of course, because "better off" and "worse off" are entirely up for interpretation, people argue that taxing the rich to improve the lives of the poor is not Pareto efficient because you're worse off if you have less money regardless of how much money you have left. So the only Pareto efficient solution is to grow the economy until all the poor people make enough money.
this is easily solved:
See, now #2 is efficient, because the alternative is their immediate death, which would be worse than giving up money.
economists don't want you to know this 1 neat trick
I believe this is yours
The original reddit gold....
curtseys
i really have to thank the academy for this fine, tiny, golden man