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The solution to Arrow's difficulty in social welfare


  • Thomas Cool


Arrow's Theorem holds that no constitution can satisfy certain properties. In annex to that theorem, Arrow claims that those properties are reasonable and morally desirable. In his view there thus is the difficulty that people desire a constitution that cannot exist. While the Theorem stands as a mathematical result, the additional claims concern other domains, i.e. the domains of reasonableness and morality. It are these claims that have caused much confusion in the literature. It is shown here that the claims are unwarranted, since inconsistent properties are neither reasonable nor morally desirable. It is shown too that Arrow's axiom of the Independence of Irrelevant Alternatives is not realistic, and thus unattractive. We show the existence of some constitutions that are consistent and might be optimal to many. The major error made by Arrow and his students is to mix up the context of scientific discovery and learning with the context of application to the real world by educated people.

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  • Thomas Cool, 1997. "The solution to Arrow's difficulty in social welfare," General Economics and Teaching 9707001, EconWPA, revised 04 Sep 1997.
  • Handle: RePEc:wpa:wuwpgt:9707001
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    JEL classification:

    • A - General Economics and Teaching

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