Social diversification, injustices, and Pareto optimality with non-binary preferences
We prove the existence of a Pareto optimal state of a finite society that has socially differentiated persons, each with non-binary personal preferences that quasi-order a finite set of alternatives. Everybody engages in a volitional act of choice by maximization of non-binary preferences. As a consequence of interpersonal interaction among social creatures, the social interaction outcome defined as belonging to a nonempty social maximal set exists, and thus is Pareto optimal. Injustices inflicted by one group of persons upon a socially distinct one, arising from social diversification, are, however, consistent with such a collective outcome. (95 words)
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- Kenneth J. Arrow, 1998. "What Has Economics to Say about Racial Discrimination?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 91-100, Spring.
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