Arrow’s Impossibility Theorem

Arrow’s Impossibility Theorem, proposed by economist Kenneth Arrow in 1951, is a fundamental result in social choice theory that highlights the challenges of designing a fair and rational voting system.

Get the full solved assignment PDF of MEC-006 of 2023-24 session now.

The theorem demonstrates that it is impossible to formulate a voting system that satisfies all of the following criteria simultaneously:

1. Universal Suffrage: Every individual’s preference should be taken into account.
2. Independence of Irrelevant Alternatives: The ranking of alternatives should not be affected by the presence or absence of other alternatives.
3. Non-dictatorship: There should be no individual whose preferences always prevail, regardless of the preferences of others.

In simpler terms, Arrow’s Impossibility Theorem states that no voting system can be devised that is simultaneously fair, non-manipulable, and able to translate individual preferences into a coherent group decision.

This theorem has profound implications for democratic decision-making and has led to a deeper understanding of the limitations and complexities involved in aggregating individual preferences into a collective choice. It challenges the notion of a perfect voting system and suggests that any system will inevitably have shortcomings.

The theorem has sparked extensive research into alternative voting systems and methods for decision-making, such as ranked-choice voting or approval voting, which aim to address some of the issues identified by Arrow’s theorem. However, no system has been found that satisfies all the criteria laid out by Arrow, reinforcing the notion that there is no perfect way to translate diverse individual preferences into a consistent and fair collective decision.