Introduction to social choice and welfare

Social choice theory is concerned with the evaluation of alternative methods of collective decision-making, as well as with the logical foundations of welfare economics. In turn, welfare economics is concerned with the critical scrutiny of the performance of actual and/or imaginary economic systems, as well as with the critique, design and implementation of alternative economic policies. The Handbook of Social Choice and Welfare, which is edited by Kenneth Arrow, Amartya Sen and Kotaro Suzumura, presents, in two volumes, essays on past and on-going work in social choice theory and welfare economics. This paper is written as an extensive introduction to the Handbook with the purpose of placing the broad issues examined in the two volumes in better perspective, discussing the historical background of social choice theory, the vistas opened by Arrow's Social Choice and Individual Values, the famous "socialist planning" controversy, and the theoretical and practical significance of social choice theory.social choice theory, welfare economics, socialist planning controversy, social welfare function, Arrovian impossibility theorems, voting schemes, implementation theory, equity and justice, welfare and rights, functioning and capability, procedural fairness

Constitutional Democracy and Public Judgements

This paper proposes a new conceptual framework of a liberal social order, which emphasizes the freedom of action in social interaction and the freedom of participation in social rule-making process. Our articulation of public decision-making process can be interpreted as a formal way of capturing the essence of constitutional democracy, which is an impure mixture of constructivist rationalism and evolutionary rationalism, since we are bringing what is spontaneously evolved through individual experiments into the stage of public design and social choice of a new institutional set of rules. It is also construed as an impure mixture of perfect procedural fairness and pure procedural fairness, since the public judgements to be formed through public deliberations should pay due attention to the intrinsic value of procedures in conferring agency freedom to individuals, as well as to the instrumental value of procedures in expanding well-being freedom of individuals.

Multi-Profile Intergenerational Social Choice

Ferejohn and Page transplanted a stationarity axiom from Koopmans' theory of impatience into Arrow's social choice theory with an infinite horizon and showed that the Arrow axioms and stationarity lead to a dictatorship by the first generation. We prove that the negative implications of their stationarity axiom are more far-reaching: there is no Arrow social welfare function satisfying their stationarity axiom. We propose a more suitable stationarity axiom, and show that an Arrow social welfare function satisfies this modified version if and only if it is a lexicographic dictatorship where the generations are taken into consideration in chronological order.Multi-Profile Social Choice, Infinite-Horizon Intergenerational Choice, Lexicographic Dictatorships

Decisive coalitions and coherence properties

In a seminal contribution, Hansson has demonstrated that the family of decisive coalitions associated with an Arrovian social welfare function forms an ultrafilter. If the population under consideration is infinite, his result implies the existence of nondictatorial social welfare functions. He goes on to show that if transitivity is weakened to quasi-transitivity as the coherence property imposed on a social relation, the set of decisive coalitions is a filter. We examine the structure of decisive coalitions and analogous concepts with alternative coherence properties, namely, acyclicity and Suzumura consistency, and without assuming that the social relation is complete.Infinite-Population Social Choice, Decisiveness, Suzumura Consistency

Multi-Profile Intergenerational Social Choice

In an infinite-horizon setting, Ferejohn and Page showed that any social welfare function satisfying Arrow’s axioms and stationarity must be a dictatorship of the first generation. Packel strengthened this result by proving that no collective choice rule generating complete social preferences can satisfy unlimited domain, weak Pareto and stationarity. We prove that this impossibility survives under a domain restriction and without completeness. We propose a more suitable stationarity axiom and show that a social welfare function on a specific domain satisfies this modified version and some standard social choice axioms if and only if it is a chronological dictatorshipMulti-Profile Social Choice, Infinite-Horizon Intergenerational Choice, Lexicographic Dictatorships

On Initial Conferment of Individual Rights

An extended social choice framework is proposed for the analysis of initial conferment of individual rights. It captures the intuitive conception of decisionmaking procedure as a carrier of intrinsic value along with the instrumental usefulness thereof in realizing valuable culmination outcomes. Our model of social decision-making consists of two stages. In the first stage, the society decides on the game form rights-system to be promulgated. In the second stage, the promulgated game form rights-system, coupled with the revealed profile of individual preference orderings over the set of culmination outcomes, determines a fully-fledged game, the play of which determines a culmination outcome at the Nash equilibrium. A set of sufficient conditions for the existence of a democratic social choice procedure, which chooses a game form in the first stage that is not only liberal, efficient and Nash solvable, but also uniformly workable for every revealed profile of individual preference orderings over the set of culmination outcomes, is identified.Extended alternative, Extended constitution function, Uniformly rational choice, Liberal game form, Non-consequentialist evaluation of rightssystem

On Initial Conferment of Individual Rights

An extended social choice framework is proposed for the analysis of initial conferment of individual rights. This framework captures the intuitive conception of decision-making procedure as a carrier of intrinsic value along with the instrumental usefulness thereof in realizing valuable culmination outcomes. The model of social decision-making consists of two stages. In the first stage, the society decides on the game-form rights to be promulgated. In the second stage, the promulgated game form rights, coupled with the revealed profile of individual preference orderings over the set of culmination outcomes, determine a fully-fledged game, the play of which determines a culmination outcome at the Nash equilibrium. A set of sufficient conditions for the existence of a social choice procedure, which can choose a game form in the first stage that is not only liberal, but also uniformly applicable to every revealed profile of individual preference orderings over the set of culmination outcomes, is identified.Extended alternative, Extended constitution function, Uniformly rational choice, Liberal game form, Non-consequentialist evaluation of rightssystem

External Norms and Rationality of Choice

Ever since Sen (1993) criticized the notion of internal consistency of choice, there exists a widespread perception that the standard rationalizability approach to the theory of choice has difficulties in coping with the existence of external norms. We introduce a concept of norm-conditional rationalizability and show that external norms can be made compatible with the methods underlying the rationalizability approach. This claim is substantiated by characterizing norm-conditional rationalizability by means of suitably modified revealed preference axioms in the theory of rational choice on general domains due to Richter (1966; 1971) and Hansson (1968).