Social Choice Theory

We can’t please everyone, but we can try. That’s what social choice theory is all about.

Social choice theory begs the question, “What are some rules we can lay down that most people would be down with?” For instance, constitutions are a real life example of social choice theory. Constitutions lay down some basic laws that everyone agrees to follow. But...constitutions are far from perfect. Some people might like the Constitution, while others hate it. Some want to add to it, some want to tear it down. Finding a middle ground that includes all of these different preferences and opinions is no easy task.

Social choice theory, the economic theory that tries to take into account everyone’s individual preferences, was created by economist Kenneth Arrow in the 1950s. Arrow believed five conditions needed to be addressed in order to reflect these preferences: universality, responsiveness, independence of irrelevant alternatives, non-imposition, and non-dictatorship (sorry, dictators).

The real kicker? Arrow’s Impossibility Theorem is the theory which says that creating rules that make everyone happy is impossible without breaking one of those five conditions. Oof.