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First best

adj, noun

Definitions

Adjective
  1. 1
    Characterized by all optimality conditions being satisfiable. not-comparable

    "Here the government should avoid any policy that affects the workers' decision rules since it would harm efficiency, and the first-best way of pursuing distributional goals is through lump-sum transfers."

Noun
  1. 1
    A situation where all optimality conditions are satisfied.

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