Key Ideas

1. Social welfare function captures individual preferences and aggregates them into a societal preference.
Arrow argues that there is no perfect social welfare function that can satisfy all desirable properties.
2. Arrow's Impossibility Theorem states that it is impossible for any social welfare function to satisfy a set of seemingly reasonable properties simultaneously.
3. The notion of transitivity is central to social choice theory. Arrow shows that it is impossible for a social preference to always be transitive.
4. Arrow introduces the concept of independence of irrelevant alterna....
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Quiz