scholarly journals The Death of Welfare Economics

2019 ◽  
Vol 51 (5) ◽  
pp. 827-865 ◽  
Author(s):  
Herrade Igersheim
Keyword(s):  
Social Welfare ◽  
Social Choice ◽  
Social Welfare Function ◽  
Choice Theory ◽  
Social Choice Theory ◽  
Welfare Economics ◽  
Impossibility Result ◽  
Impossibility Theorem ◽  
Individual Values ◽  
The Social

The death of welfare economics has been declared several times. One of the reasons cited for these plural obituaries is that Kenneth Arrow’s impossibility theorem, as set out in his pathbreaking Social Choice and Individual Values in 1951, has shown that the social welfare function—one of the main concepts of the new welfare economics as defined by Abram Bergson (Burk) in 1938 and clarified by Paul Samuelson in the Foundations of Economic Analysis—does not exist under reasonable conditions. Indeed, from the very start, Arrow kept asserting that his famous impossibility result has direct and devastating consequences for the Berg-son-Samuelson social welfare function, though he seemed to soften his position in the early eighties. On his side, especially from the seventies on, Samuelson remained active on this issue and continued to defend the concept he had devised with Bergson, tooth and nail, against Arrow’s attacks. The aim of this article is precisely to examine this rather strange controversy, which is almost unknown in the scientific community, even though it lasted more than fifty years and involved a conflict between two economic giants, Arrow and Samuelson, and, behind them, two distinct communities—welfare economics, which was on the wane, against the emerging social choice theory—representing two conflicting ways of dealing with mathematical tools in welfare economics and two different conceptions of social welfare.

Arrow’s Theorem

2020 ◽  
Author(s):  
Conal Duddy ◽  
Ashley Piggins
Keyword(s):  
Social Welfare ◽  
Social Choice ◽  
Social Welfare Function ◽  
Social Preference ◽  
Social Choice Theory ◽  
Impossibility Theorem ◽  
Preference Ordering ◽  
Individual Values ◽  
Arrow’S Theorem ◽  
Arrow's Theorem

Kenneth Arrow’s “impossibility” theorem is rightly considered to be a landmark result in economic theory. It is a far-reaching result with implications not just for economics but for political science, philosophy, and many other fields. It has inspired an enormous literature, “social choice theory,” which lies on the interface of economics, politics, and philosophy. Arrow first proved the impossibility theorem in his doctoral dissertation—Social Choice and Individual Values—published in 1951. It is a remarkable result, and had Arrow not proved it, it is unlikely that the theorem would be known today. A social choice is simply a choice made by, or on behalf of, a group of people. Arrow’s theorem is concerned more specifically with the following problem. Suppose that we have a given set of options to choose from and that each member of a group of individuals has his or her own preference over these options. By what method should we construct a single ranking of the options for the group as a whole? Any such method may be represented mathematically by a “social welfare function.” This is a function that receives as its input the preference ordering of each individual and then generates as its output a social preference ordering. Arrow defined some properties that would seem to be essential to any reasonable social welfare function. These properties are called “unrestricted domain,” “weak Pareto,” “independence of irrelevant alternatives,” and “non-dictatorship.” Each of these properties, when taken alone, does appear to be very necessary indeed. Yet, Arrow proved that these properties are in fact mutually incompatible. This troubling fact has been central to the study of social choice ever since.

Social Welfare Functions

2016 ◽  
Author(s):  
John Weymark
Keyword(s):  
Social Welfare ◽  
Social Choice ◽  
Comparative Evaluation ◽  
Social Welfare Function ◽  
Social Preferences ◽  
Choice Theory ◽  
Social Choice Theory ◽  
Welfare Economics

This chapter provides an introduction to the use of social welfare functions in welfare economics and social choice theory for the comparative evaluation of social alternatives. With a social welfare function, social preferences depend on individual well-beings. These well-beings are expressed in terms of either preferences or utilities. Three main approaches are considered: Bergson-Samuelson social welfare functions, Arrovian social welfare functions, and Sen’s social welfare functionals. How the measurability and comparability of utility can be modeled and how limitations on the types of utility comparisons that are possible restrict the kinds of social welfare functions that can be considered is also discussed. Extensive social choice theory is used to deal with heterogeneous opinions about how to make utility comparisons.

scholarly journals Negotiating Socially Optimal Allocations of Resources

2006 ◽  
Vol 25 ◽  
pp. 315-348 ◽  
Author(s):  
U. Endriss ◽  
N. Maudet ◽  
F. Sadri ◽  
F. Toni
Keyword(s):  
Social Welfare ◽  
Social Choice ◽  
Multiagent System ◽  
Optimal Allocation ◽  
Choice Theory ◽  
Social Choice Theory ◽  
Allocation Of Resources ◽  
Artificial Society ◽  
The Social ◽  
Optimal Allocations

A multiagent system may be thought of as an artificial society of autonomous software agents and we can apply concepts borrowed from welfare economics and social choice theory to assess the social welfare of such an agent society. In this paper, we study an abstract negotiation framework where agents can agree on multilateral deals to exchange bundles of indivisible resources. We then analyse how these deals affect social welfare for different instances of the basic framework and different interpretations of the concept of social welfare itself. In particular, we show how certain classes of deals are both sufficient and necessary to guarantee that a socially optimal allocation of resources will be reached eventually.

Social choice

2018 ◽  
Author(s):  
Alan Hamlin
Keyword(s):  
Social Choice ◽  
Choice Theory ◽  
Formal Analysis ◽  
Social Choice Theory ◽  
Political Process ◽  
Impossibility Theorem ◽  
Social Evaluation ◽  
Individual Values ◽  
Individual Preferences ◽  
Famous Result

Social choice theory is the branch of economics concerned with the relationships between individual values, preferences and rights and collective decision making and evaluation. Social choice theory therefore provides connections between the formal analysis of rational choice, the debate on political process, and ethics. A central theme in social choice theory has been the aggregation of individual preferences into either a social decision rule or a social evaluation rule. The most famous result in social choice theory – Arrow’s impossibility theorem – is that such aggregation is impossible if individual preferences are conceived as ordinal in nature, and if the aggregation procedure is to satisfy certain apparently reasonable conditions. This result implies that neither a voting system nor a system of moral evaluation can be found that satisfies all of the required conditions. Further impossibility theorems arise from attempts to model the role of individual rights. Much of social choice theory is concerned with interpreting, extending and questioning these impossibility theorems in a variety of contexts. This discussion has generated an extensive interchange at the margins of economics and ethics on topics such as the commensurability of values and the relationship between morality and rationality.

Precursors to Public Choice

2019 ◽  
pp. 796-816
Author(s):  
Iain McLean
Keyword(s):  
Public Choice ◽  
Social Choice ◽  
Choice Theory ◽  
Social Choice Theory ◽  
Ancient Greek ◽  
The Social ◽  
Mathematical Skill ◽  
The Many ◽  
Selection Of

This chapter reviews the many appearances, disappearances, and reappearances of axiomatic thought about social choice and elections since the era of ancient Greek democracy. Social choice is linked to the wider public-choice movement because both are theories of agency. Thus, just as the first public-choice theorists include Hobbes, Hume, and Madison, so the first social-choice theorists include Pliny, Llull, and Cusanus. The social-choice theory of agency appears in many strands. The most important of these are binary vs. nonbinary choice; aggregation of judgement vs. aggregation of opinion; and selection of one person vs. selection of many people. The development of social choice required both a public-choice mindset and mathematical skill.

scholarly journals Measuring Fairness, Inequality, and Big Data: Social Choice Since Arrow

2019 ◽  
Vol 22 (1) ◽  
pp. 435-460
Author(s):  
John W. Patty ◽  
Elizabeth Maggie Penn
Keyword(s):  
Big Data ◽  
Social Choice ◽  
Institutional Design ◽  
Choice Theory ◽  
Social Choice Theory ◽  
Impossibility Theorem ◽  
Axiomatic Method ◽  
Subsequent Work ◽  
Fundamental Interest ◽  
Starting Point

Kenneth J. Arrow was one of the most important intellectuals of the twentieth century, and his “impossibility theorem” is arguably the starting point of modern, axiomatic social choice theory. In this review, we begin with a brief discussion of Arrow's theorem and subsequent work that extended the result. We then discuss its implications for voting and constitutional systems, including a number of seminal results—both positive and negative—that characterize what such systems can accomplish and why. We then depart from this narrow interpretation of the result to consider more varied institutional design questions such as apportionment and geographical districting. Following this, we address the theorem's implications for measurement of concepts of fundamental interest to political science such as justice and inequality. Finally, we address current work applying social choice concepts and the axiomatic method to data analysis more generally.

Bargaining in Legislatures

1989 ◽  
Vol 83 (4) ◽  
pp. 1181-1206 ◽  
Author(s):  
David P. Baron ◽  
John A. Ferejohn
Keyword(s):  
Social Choice ◽  
Choice Theory ◽  
Social Choice Theory ◽  
Institutional Structure ◽  
The Social ◽  
Free Model ◽  
Sequential Nature ◽  
Choice Literature ◽  
Formal Rules

Bargaining in legislatures is conducted according to formal rules specifying who may make proposals and how they will be decided. Legislative outcomes depend on those rules and on the structure of the legislature. Although the social choice literature provides theories about voting equilibria, it does not endogenize the formation of the agenda on which the voting is based and rarely takes into account the institutional structure found in legislatures. In our theory members of the legislature act noncooperatively in choosing strategies to serve their own districts, explicitly taking into account the strategies members adopt in response to the sequential nature of proposal making and voting. The model permits the characterization of a legislative equilibrium reflecting the structure of the legislature and also allows consideration of the choice of elements of that structure in a context in which the standard, institution-free model of social choice theory yields no equilibrium.

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