Social choice theory


Social choice theory

Social choice theory is a theoretical framework for measuring individual interests, values, or welfares as an aggregate towards collective decision. A non-theoretical example of a collective decision is passing a set of laws under a constitution. Social choice theory dates from Condorcet's formulation of the voting paradox. Kenneth Arrow's Social Choice and Individual Values (1951) and the Arrow's impossibility theorem are generally acknowledged as the basis of the modern social choice theory.

Social choice theory blends elements of welfare economics and voting theory. It is methodologically individualistic, in that it aggregates preferences and behaviors of individual members of society. A characteristic approach proceeds from a set of reasonable axioms of social choice to a social welfare function (or constitution). Many earlier results uncover the logical incompatibility of various axioms and, having revealed thus the aggregation problem, suggest reformulation or theoretical triage in dropping some axiom(s).

Social choice theory and public choice theory may overlap but are disjoint if narrowly construed. The JEL classification codes places Social Choice into JEL D71 (with Clubs, Committees, and Associations) whereas most Public Choice subcategories are in JEL D72 (Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior).

Contents

Interpersonal utility comparison

Following Jeremy Bentham, utilitarians have argued that preferences and utility functions of individuals are inter-personally comparable and may therefore be added to arrive at a measure of aggregate utility. Utilitarian ethics call for maximizing this aggregate.

Lionel Robbins questioned whether mental states, and utilities they reflect, can be measured and, a fortiori, interpersonal comparisons of utility as well as the social choice theory on which it is based. Consider for instance the law of diminishing marginal utility, according to which utility of an added quantity of a good decreases with the amount of the good that is already in possession of the individual. It has been used to defend transfers of wealth from the ``rich to the ``poor on the premise that the former do not derive as much utility as the latter from an extra unit of income. In an essay (1935, pp. 138–40), Robbins argued that this notion is beyond positive science; that is, one cannot measure changes in the utility of someone else, nor is it required by positive theory.

Apologists of the interpersonal comparison of utility (ICU)have argued that Robbins claimed too much. John Harsanyi agrees that full comparability of mental states such as utility is never possible but believes, however, that human beings are able to make some interpersonal comparisons of utility because they share some common backgrounds, cultural experiences, etc. In the example from Amartya Sen (1970, p. 99), it should be possible to say that Emperor Nero's gain from burning Rome was outweighed by the loss incurred by the rest of the Romans. Harsanyi and Sen thus argue that at least partial comparability of utility is possible, and social-choice theory proceeds under that assumption.


Sen proposes, however, that comparability need not be partial. Kenneth Arrow's famous impossibility result spelled the second end to social choice theory, by proving the inconsistency of social preferences even when held to rather minimal standards such as non-dictatorship and Pareto optimality. Under partial comparability, this result becomes less restrictive. Sen's theory of informational broadening does away with the rest. Sen believes that even complete ICU would lead to socially suboptimal choices because mental states are malleable. A starving peasant may have a particularly sunny disposition and thereby derive high utility from a small income. This fact should not nullify, however, his claim to compensation or equality in the realm of social choice.

Social decisions should accordingly be based on immalleable factors. Sen proposes interpersonal comparisons based on a wide range of data. His theory is concerned with access to advantage, viewed as an individual's access to goods that satisfy basic needs (e.g., food), freedoms (in the labor market, for instance), and capabilities. We can proceed to make social choices based on real variables, and thereby address actual position, and access to advantage. Most importantly, Sen's method of informational broadening allows social choice theory to escape both the objections of Arrow and Robbins, which looked as though they would permanently harm social choice theory.

See also

References

External links


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Social Choice Theory — Die Sozialwahltheorie (engl. Social Choice Theory), auch Theorie kollektiver Entscheidungen (engl. Theory of Collective Choice) genannt, beschäftigt sich mit Gruppenentscheidungen durch Aggregation von individuellen Präferenzen/Entscheidungen zu… …   Deutsch Wikipedia

  • Social Choice Theory — Individual preferences are aggregated to produce a social welfare function essentially a preference ranking of the scenarios that are possible to society. Social choice theory is the philosophical and mathematical study of the type of conclusions …   Investment dictionary

  • Social exchange theory — is a social psychological and sociological perspective and that explains social change and stability as a process of negotiated exchanges between parties. Social exchange theory posits that all human relationships are formed by the use of a… …   Wikipedia

  • Social judgment theory — (SJT) is a persuasion theory proposed by Muzafer Sherif and Carl Hovland (1961). OverviewArising out of the socio psychological tradition, SJT is a theory that focuses on the internal processes of an individual’s judgment with relation to a… …   Wikipedia

  • Social development theory — In sociology, social development theory attempts to explain qualitative changes in the structure and framework of society, that help the society to better realize its aims and objectives. Development can be broadly defined in a manner applicable… …   Wikipedia

  • Social Choice and Individual Values — Kenneth Arrow s monograph Social Choice and Individual Values (1951, 2nd ed., 1963) and a theorem within it created modern social choice theory, a rigorous melding of social ethics and voting theory with an economic flavor. Somewhat formally, the …   Wikipedia

  • Social Choice — Die Sozialwahltheorie (engl. Social Choice Theory), auch Theorie kollektiver Entscheidungen (engl. Theory of Collective Choice) genannt, beschäftigt sich mit Gruppenentscheidungen durch Aggregation von individuellen Präferenzen/Entscheidungen zu… …   Deutsch Wikipedia

  • Rational choice theory — This article is about a theory of economics. For Rational Choice Theory as applied to criminology, see Rational choice theory (criminology). Economics …   Wikipedia

  • Public choice theory — Public choice in economic theory is the use of modern economic tools to study problems that are traditionally in the province of political science. (A more general term is political economy , an earlier name for economics that evokes its… …   Wikipedia

  • Public Choice Theory — Die Neue Politische Ökonomie (NPÖ) (auch Public Choice), umfasst jene Theorien und Forschungsgebiete, die politisches Verhalten, Entscheidungsprozesse und Strukturen überwiegend auf Basis der neoklassischen Wirtschaftstheorie erklären. Betrachtet …   Deutsch Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.