CPO-2002 Lecture 47: Lecture 47
Document Summary
The pathologies of (cid:373)ajority rule apply to (cid:862)a(cid:374)y(cid:863) group de(cid:272)isio(cid:374) pro(cid:272)edure that (cid:373)eets so(cid:373)e minimal standards of fairness. These minimal standards are: non-dictatorship (d, universal admissibility (u, unanimity (or pareto optimality) (p, independence from irrelevant alternatives (i) Arrow proved that it is impossible to meet all 4 of these fairness conditions while simultaneously guaranteeing that the group be able to make rational decisions (that is, avoid the instability caused by group intransitivity) His fairness conditions are minimal - we might demand much more from our institutions than these conditions. But if stable outcomes can not be guaranteed in these minimally fair institutions, then they can not be guaranteed under any more normatively ambitious institutions. There must be no individual who fully determines the outcome of the group decision-making process regardless of the preferences of the other group members. Individuals can adopt any rational preference ordering over the available alternatives.
