A Pareto-Efficient Donut


In line at the Star$$ on campus, I got to chatting with Professor C just in front of me.  She ordered a latte and bought the last of the delicious Star$$ cake donuts, which I had had my eye on.  When I got to the order desk, I asked the barista (actually a male, so I guess a barister!) if he had any more in back.  Professor C offered to split the donut with me, and I said OK, but I insisted on giving her $1, my share of its cost.  She then said she prefers one-half donut to a whole donut anyway, and so do I.  She gave the barister a $1 tip.  Everyone was better off—a clear Pareto improvement compared to the situation where she got the donut, and the barister and I got nothing. 

Antonio Fà

If "Barista" is a word from Italian derivation then we use "barista" even for male!


So, why wasn't the "Pareto improvement" linked to whatever it is so we, the ingnorant, can simply click on it and educate ourselves?


All sorts of wacky things happen when you drop assumptions of strict monotonocity.

martin tetaz

or a clear case of politeness. After all we dont know whether Professor C actually hate having to share


exactly.. altruism in the coffee shop... its a start anyways


Professor C wasn't better off. She was equally well off. She could have just thrown away half the donut instead of giving it to you, and everything would be the same for her: she'd be down $2 and own half a donut.

So, some people were better off and nobody was worse off. That still qualifies as a Pareto improvement, right?


But indeed she was (assuming she honestly prefers half a donut) better off. She avoids either the discomfort of an over-full stomach, or the angst of wasting food.


"She then said she prefers one-half donut to a whole donut anyway, and so do I."

Ah, the lies we tell to friends and colleagues.


Was that a real case of politeness??


No, I'm not sure I agree with your concluding statement, "everyone was better off". You got half a doughnut for $1, which effectively puts you at zero net gain. Prof. C's opportunity cost was half a doughnut which she could've eaten later -so, in monetary terms, her net loss was $1. The 'barister' got this $1.
I'm probably missing the point here. Does this have wider application aside from this doughnut example?


While I like "Star$$" can't we just abbreviate it to *$?


does not the matter of efficiency depend upon the aim. If my aims are the necessary, the sufficient and the decisive conditions of a and your aim is b i.e., you need all of a in order to figure out for your selves what would be sufficient and decisive for b, then would not gaining a be a Pareto improvement?


who carries cash?


Who doesn't?


I believe she would have been better off if she got what she wanted. And that would be for you to ask for her number.


She gained the utility value of tipping the barister and helping a colleague. She had already sunk the $2 in her mind so the tip gave her greater utility than receiving back $1. The one who received the donut paid the going rate for 1/2 a donut but now has an implied obligation to reciprocate so may actually be worse off. OK OK it was a great and practical gesture but it sure is interesting to dissect it!


No donuts were wasted in the creation of this post. I would like to point out however, that the seller of the donuts (not the barister) loses $2. Even if the donut you would have purchased was consumed by someone else it seems like you would have deceased the donut cooker's margins? maybe? And healthcare workers surely suffer from healthier donut consuming habits.


But this was the last donut, so the effect on the donut-cooker was at most to send a signal to make more donuts tomorrow.


I missed that the first time! Sorry. I need to finish my coffee and donuts before I comment on posts.