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A commonsense assessment of Arrow’s theorem

Author

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  • Ortona Guido

    (Professor of Economics, Università del Piemonte Orientale, via Cavour 84, Alessandria 15121, Italy.)

Abstract

The usual, pessimistic interpretation of Arrow’s General Possibility Theorem (often “Impossibility” in textbooks) is excessive. The impossibility defined by Arrow occurs only in presence of a tie or of a cycle. These cases are rare or very rare, and their presence may be assessed ex post. If they occur it is necessary to resort to a second-best rule, but this two-stage procedure does not induce strategic behavior, nor impeaches the use of the Condorcet rule (in observance of the axioms) in all the others.The paper conclusions sustain that implementation of modern management systems to government’s public institutions should deal with a different behavior used to know at companies. In this respect, the paper high-lights different aspects between companies and public institutions behavior admitting similarities on organizational structure and internal procedures.

Suggested Citation

  • Ortona Guido, 2016. "A commonsense assessment of Arrow’s theorem," Journal of Heterodox Economics, Sciendo, vol. 3(1), pages 54-62, June.
    • Handle: RePEc:vrs:joheec:v:3:y:2016:i:1:p:54-62:n:3
    DOI: 10.1515/jheec-2016-0003
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    References listed on IDEAS

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    More about this item

    Keywords

    Arrow’s Theorem; Social Choice; Condorcet Rule;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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