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Social choice theory is a theoretical framework for measuring individual interests values or welfares as an aggregate towards collective decision. A non-theoretical example of a collective decision is passing a set of laws under a constitution. Social choice theory dates from Condorcet's formulation of the voting paradox. Kenneth Arrow's 1951 book Social Choice and Individual Values and the theorem now known as Arrow's impossibility theorem contained within it are generally acknowledged as the basis of the social choice theory in its modern form.

Social choice theory blends elements of welfare economics and voting theory and generalizes them. It is methodologically individualistic that is "bottom-up" in aggregating from individuals to society. A characteristic method proceeds from formulating some set of apparently reasonable axioms of social choice to construct a social welfare function (or constitution) and derive the implications of those axioms. Many earlier results indicate the logical incompatibility of different axioms revealing an aggregation problem and suggesting reformulation or theoretical triage in dropping some axiom(s).

A related field is public choice theory. The fields may overlap but narrowly construed the JEL classification codes place Social Choice under JEL D71 (with Clubs Committees and Associations) while most Public Choice articles fall under JEL D72 (Economic Models of Political Processes: Rent-Seeking Elections Legislatures and Voting Behavior). Contents 1 Interpersonal utility comparison 2 See also 3 References 4 External links Interpersonal utility comparison

Following Jeremy Bentham utilitarians have argued that individuals have utilities that are measurable individually and interpersonally and that they can be added up for a measure of aggregate utility. Utilitarian ethics calls for maximizing this aggregate.

Lionel Robbins doubted that mental states (including utilities) can be measured. A fortiori he criticized interpersonal comparisons of utility and the social choice theory on which it was based for assuming that we could determine the amount of satisfaction other individuals derive from certain situations. For example the law of diminishing marginal utility states that the more of a good one has the less utility one receives from an additional unit of the good. Such a principle has been used to defend transfers of wealth from the rich to the poor on the basis that a rich man does not derive as much utility from an extra unit of income as does a poor man. Robbins (1935 pp. 13840) argued that this notion is beyond positive science. It is never possible by testing or observation to measure changes in utility someone else gets from a change in income nor is it required by positive theory. From this it is arguable that interpersonal comparisons of utility and thus social choice theory based on comparing people's utility gains and losses are a lost cause.

Other theorists have argued that Robbins claimed too much. John Harsanyi for instance agrees that full comparability of mental states such as utility is never possible. He believes however that human beings are able to make some interpersonal comparisons of utility. Because human beings share some common backgrounds cultural experiences and so on we should be able to compare welfare in some less controversial cases. To borrow an example from Amartya Sen (1970 p. 99) it should be possible to say that Emperor Nero's gain from burning Rome was outweighed by the loss of the rest of the Romans. Thus Harsanyi and Sen argue we can have partial comparability. Some states are easier to compare than others and we can proceed with ICU (interpersonal comparisons of utility) and social choice theory based on ICU as long as we are careful not to claim too much.

Sen however proposes pushing beyond partial comparability. Kenneth Arrow's famous impossibility result spelled the second end to social choice theory by proving the inconsistency of social preferences even when held to very minimal standards such as non-dictatorship and Pareto optimality. Partial comparability does away with some of this result. Sen's theory of informational broadening does away with the rest. Sen believes that ICU even if it were perfect would still lead to sub-optimal social choices because mental states are malleable. A starving peasant may have a particularly sunny disposition and may even find a way to get a great deal of utility from a very small amount of income. However his high utility value should not nullify his claim to compensation or equality in the realm of social choice.

Instead social choice decisions should be based on variables that are not subject to such malleability as mental states. Sen proposes interpersonal comparisons based on a wider range of real data. Particularly Sen is worried about access to advantage which he measures by a person's access to basic needs-satisfying goods (like food) freedoms (as in a labor market) and capabilities. We can proceed to make social choices based on real variables and thereby address actual position and access to advantage. Most importantly Sen's method of informational broadening allows social choice theory to escape both the objections of Arrow and Robbins which looked as though they would cripple social choice theory permanently. See also Part of a series on Utilitarianism Predecessors Epicurus David Hume  William Godwin  Francis Hutcheson People Jeremy Bentham  John Stuart Mill Henry Sidgwick  Richard Mervyn Hare  Peter Singer Types of utilitarianism Preference  Rule  Act Two-level  Total  Average Relative  Negative  Hedonism Enlightened self-interest Key concepts Pain  Suffering  Pleasure Utility  Happiness  Eudaimonia Consequentialism  Felicific calculus Problems Mere addition paradox Paradox of hedonism Utility monster Related topics Rational choice theory  Game theory Social choice  Neoclassical economics   Politics portal v d e Arrow's impossibility theorem Capability approach Compensation principle Extended sympathy GibbardSatterthwaite theorem Justice (economics) Liberal paradox Mechanism design Nakamura number Rule according to higher law Relative Utilitarianism Voting system References Kenneth J. Arrow 1951 2nd ed. 1963 Social Choice and Individual Values. ISBN 0-300-01364-7 1972 Link to text of Nobel lecture with Section 8 on the theory and background. 1983 Collected Papers v. 1 Social Choice and Justice ISBN 0-674-13760-4 Kenneth J. Arrow Amartya K. Sen and Kotaro Suzumura ed. 1997 Social Choice Re-Examined 2 vol. ISBN 0-312-12739-1 & ISBN 0-312-12741-3 ed. 2002 Handbook of Social Choice and Welfare. Vol. 1 ch. abstracts. Walter Bossert and John A. Weymark 2008. "social choice (new developments)" The New Palgrave Dictionary of Economics 2nd Edition Abstract. Allan M. Feldman and Roberto Serrano 2006. Welfare Economics and Social Choice Theory 2nd ed. ISBN 0387293671 ISBN 9780387293677 Arrow-serachable chapter previews. Gaertner Wulf (2006). A primer in social choice theory. Oxford: Oxford University Press. ISBN 0-19-929751-7.  John C. Harsanyi 1987 interpersonal utility comparisons" The New Palgrave: A Dictionary of Economics v. 2 pp. 95558. Moulin Herve (1988). Axioms of cooperative decision making. Cambridge: Cambridge University Press. ISBN 0-521-42458-5.  Nitzan Shmuel (2010). Collective Preference and Choice. Cambridge UK: Cambridge University Press. ISBN 0-521-72213-6.  Lionel Robbins 1935 2nd ed.. An Essay on the Nature and Significance of Economic Science ch. VI 1938 "Interpersonal Comparisons of Utility: A Comment" Economic Journal 43(4) 63541 Amartya K. Sen 1970 1984 Collective Choice and Social Welfare. ISBN 0-444-85127-5 Description. 1998 "The Possibility of Social Choice" Nobel lecture. 1987 social choice" The New Palgrave: A Dictionary of Economics v. 4 pp. 38293. 2008. social choice". The New Palgrave Dictionary of Economics 2nd Edition Abstract. Shoham Yoav; Leyton-Brown Kevin (2009). Multiagent Systems: Algorithmic Game-Theoretic and Logical Foundations. New York: Cambridge University Press. ISBN 978-0-521-89943-7. http://www.masfoundations.org. . A comprehensive reference from a computational perspective; see Chapter 9. Downloadable free online. Kotaro Suzumura 1983 Rational Choice Collective Decisions and Social Welfare. ISBN 0-521-23862-5 Taylor Alan D. (2005). Social choice and the mathematics of manipulation. New York: Cambridge University Press. ISBN 0-521-00883-2.  External links The Society for Social Choice and Welfare Social Choice and Welfare Social Choice Bibliography by J. S. Kelly