Primer Teorema del Bienestar I

The First Welfare Theorem states that the equilibrium in a set of perfectly competitive markets is Pareto-efficient. This means no individual can be made better off without making someone else worse off.

It is based on key assumptions: the absence of externalities, perfect information, rational agents, complete markets, and no transaction costs.

The theorem demonstrates how, under certain conditions, decentralized decision-making can achieve Pareto efficiency. When all participants, sellers, and buyers act as price-takers, resources are allocated efficiently, minimizing waste or misallocation.

For example, imagine two individuals trading apples and oranges in a perfectly competitive market. One individual values apples more than oranges, while the other values oranges more than apples.

Both individuals act rationally, follow market prices, incur no transaction costs, and continue to exchange their goods until they have fully satisfied their preferences

At this point, no further trade can improve one individual’s situation without making the other worse off, achieving Pareto efficiency.

However, in real-world scenarios, factors like factory pollution or a lack of transparency in pricing c