What is the diffence between pareto effciency and allocative efficiency?

[hereferi]

Thanks before hand.

[Shriekingbrush867]

All allocative efficient solutions are Pareto efficient. But there are non-allocative Pareto efficient solutions as well.
Pareto efficiency, or Pareto optimality, is an important concept in economics with broad applications in game theory, engineering and the social sciences. The term is named after Vilfredo Pareto, an Italian economist who used the concept in his studies of economic efficiency and income distribution.

Given a set of alternative allocations of, say, goods or income for a set of individuals, a movement from one allocation to another that can make at least one individual better off without making any other individual worse off is called a Pareto improvement. An allocation is Pareto efficient or Pareto optimal when no further Pareto improvements can be made. This is often called a strong Pareto optimum (SPO).

A weak Pareto optimum (WPO) satisfies a less stringent requirement, in which a new allocation is only considered to be a Pareto improvement if it is strictly preferred by all individuals (i.e., all must gain with the new allocation). The set of SPO solutions is a subset of the set of WPO solutions, because an SPO satisfies the stronger requirement that there is no allocation that is strictly preferred by one individual and weakly preferred by the rest (i.e., no individual loses out, and at least one individual gains). Thus it is easier to be WPO than SPO.
An economic system that is Pareto efficient implies that no individual can be made better off without another being made worse off. Here 'better off' is often interpreted "put in a more preferred position." It is commonly accepted that outcomes that are not Pareto efficient are to be avoided, and therefore Pareto efficiency is an important criterion for evaluating economic systems and public policies.

If economic allocation in any system (in the real world or in a model) is not Pareto efficient, there is theoretical potential for a Pareto improvement - an increase in Pareto efficiency: through reallocation, improvements to at least one participant's well-being can be made without reducing any other participant's well-being.

In the real world ensuring that nobody is disadvantaged by a change aimed at improving economic efficiency may require compensation of one or more parties. For instance, if a change in economic policy dictates that a legally protected monopoly ceases to exist and that market subsequently becomes competitive and more efficient, the monopolist will be made worse off. However, the loss to the monopolist will be more than offset by the gain in efficiency. This means the monopolist can be compensated for its loss while still leaving an efficiency gain to be realised by others in the economy. Thus, the requirement of nobody being made worse off for a gain to others is met.
In real-world practice, the compensation principle often appealed to is hypothetical. That is, for the alleged Pareto improvement, say from public regulation of the monopolist or removal of tariffs, or other losers from a policy change are not (fully) compensated. The change thus results in distribution effects in addition to any Pareto improvement that might have taken place. The theory of hypothetical compensation is part of Kaldor-Hicks efficiency. (Ng, 1983)
Under certain idealised conditions, it can be shown that a system of free markets will lead to a Pareto efficient outcome. This is called the first welfare theorem. It was first demonstrated mathematically by economists Kenneth Arrow and Gerard Debreu. However, the result does not rigorously establish welfare results for real economies because of the restrictive assumptions necessary for the proof (markets exist for all possible goods, markets are perfectly competitive, transaction costs are negligible, and there must be no externalities).
An alleged key drawback of Pareto optimality is its localisation and partial ordering.[citation needed] In an economic system with millions of variables there can be very many local optimum points. The Pareto improvement criterion does not define any global optimum. Given a reasonable criterion which compares all points, many Pareto-optimal solutions may be far inferior to the global best solution
Allocative efficiency is the market condition whereby resources are allocated in a way that maximizes the net benefit attained through their use. Allocative efficiency refers to a situation in which the limited resources of a country are allocated in accordance with the wishes of consumers. An allocatively efficient economy produces an "optimal mix" of commodities. A firm is allocatively efficient when its price is equal to its marginal costs (that is, P = MC) in a perfect market.


[edit] Conditions
A firm is allocatively efficient when its price is equal to its marginal costs (P = MC) in a perfectly competitive market.

A market will be allocatively efficient if it is producing the right goods for the right people at the right price. An allocatively efficient market is therefore one which has no imperfections.

The demand curve is equal to the marginal utility curve i.e. the (private) benefit of the additional unit, while the supply curve is equal to the marginal cost curve i.e. the (private) cost of the additional unit. In a perfect market, there are no externalities, meaning that the demand curve is also equal to the social benefit of the additional unit, while the supply curve is equal to the social cost of the additional unit. Therefore, the market equilibrium, where demand meets supply, is also where marginal social benefit meets marginal social costs. At this point, net social benefit is maximized, meaning this is the allocatively efficient outcome.
If a market or firm is not Pareto efficient, then it cannot be allocatively efficient. If somebody could be made better off without making any other individual worse off, then clearly net benefit is not maximized, and therefore the market is not allocatively efficient. In the same way, an allocatively efficient market or firm is Pareto efficient - net benefit is maximized, therefore no individual can be made better off without another individual being made at least as worse off.
However, it is possible to have Pareto efficiency without allocative efficiency. By shifting resources in the economy, a gain in benefit to one individual could be greater than the loss in benefit to another individual (see Kaldor-Hicks efficiency). Therefore, before such a shift, the market is not allocatively efficient, but might be Pareto efficient.
When a market fails to achieve allocative efficiency and resources are not allocated efficiently, there is said to be market failure. Market failure may occur with imperfect knowledge, differentiated goods, resource immobility, concentrated market power, insufficient production, externalities, or inequality of consumers' and producers' bargaining powers.

[eagerbranch557]

I mean "allocative efficiency" like the efficiency in the microeconomics context. Pareto efficiency talk about efficiency in macro view, in the context of all the economy...

"allocative efficiency" in all the productive activities are required to reach Pareto efficiency...

The terminology could be different because the context are different...

"allocative efficiency" shows efficiency in terms of productivity and relate the efficiency to change in labor force...

Pareto efficiency shows efficiency in terms of magnitude of productions and relate efficiency to productive process and resources...

"allocative" efficiency is located in short run
Pareto efficiency is located in long run