Question

In which case a contract between two agents may have pareto improvements?

Accepted Answer

Pareto improvement occurs when a change in allocation harms no one and
helps at least one person, given an initial allocation of goods for a
set of persons. For example, a firm may run Pareto improvement trials
in which they reallocate labor resources to try to boost productivity
of assembly workers without decreasing productivity of the packing and
shipping workers.

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