Compensation criteria are used to argue that changes in resource allocation should be made if the gains to some groups outweigh the losses to others, even though compensation for losses is not actually made.

Question

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Compensation criteria are designed to assess whether changes in resource allocation are justifiable even if compensation for losses is not made. It is argued that if the benefits to some groups are greater than the losses to others, then changes should be made, even if those who lose out are not compensated for their losses.

Compensation Criteria Are Used to Argue That Changes in Resource