In welfare economics, the compensation principle refers to a decision rule used to select between pairs of alternative feasible social states.

Uses for the compensation principle include:

SBC is typically American in one other respect: somewhere along the way, its stated compensation principles became little more than platitudes.

"compensation principle," The New Palgrave Dictionary of Economics, 2nd Edition.

The Board sets Credit Suisse's business strategies and approves its compensation principles based on guidance from the compensation committee.

In non-hypothetical contexts such that the compensation occurs (say in the marketplace), invoking the compensation principle is unnecessary to effect the change.

Moreover, a long-standing compensation principle was breached: compensation for refusal of planning permission was abolished in certain types of case.

An example of a compensation principle is the Pareto criterion in which a change in states entails that such compensation is not merely feasible but required.

By weighting utility variations by the marginal utilities, the social welfare function implicit to the Kaldor-Hicks compensation principle is represented by anti-egalitarian, concave indifference curves.

Especially for voltages beyond 500 V some manufacturers, most notably Infineon Technologies with its CoolMOS products, have begun to use a charge compensation principle.

The consent takes the form of a compensation principle like Pareto efficiency for making a policy change and unanimity or at least no opposition as a point of departure for social choice.

According to the compensation principle, so long as those benefiting from a particular project compensate the losers, and there is still something left over, then the result is an unambiguous gain in welfare.

According to the compensation principle, if the prospective gainers could compensate (any) prospective losers and leave no one worse off, the alternate state is to be selected (Chipman, 1987, p. 524).

His comments build on Goldman's compensation principles, which he outlined in detail at the bank's annual general meeting in May, and focus on long-term rewards for long-term service, calling on the bank's 29,400 staff to "think and act like long-term shareholders".

Topics implicated along the way include game theory, the compensation principle in welfare economics, extended sympathy, Leibniz's principle of the identity of indiscernibles, logrolling, and similarity of social judgments through single-peaked preferences, Kant's categorical imperative, or the decision process.