Definitions of Efficiency in Economics and in Law
The economic analysis of law relies upon microeconomic principles. Efficiency, a significant concept within microeconomic theory, is one of the key concepts in the economic analysis of law. There are different types of efficiency in economic literature. These types are defined as follows.
Productive Efficiency: The very first answer to the question “what is efficiency?” may be the ratio of the work done or output obtained by a certain amount of input. This is a state of maximum output using a certain source and technology during production. In other words, we can accomplish maximum output with the available source and technology we have. If the production with the sources and technology at hand is lower than maximum output, the state of inefficiency comes into picture (Arnold 2011).
Pareto Efficiency: Created by nineteenth century economist and sociologist Vilfredo Pareto (1848–1923), this term is a beneficial criterion in comparing...
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Deyneli, F. (2019). Efficiency. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_41
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