Abstract
In this paper, we investigate how well Arrow's impossibility theorem, a typical no-existence proof, can explain real human decision-making. Since the conclusion of a no-existence proof is universal, it may also be useful to examine instances of illogical decision-making which are actually handled in reality if an Arrovian approach is seriously considered. Then, we try to modify the framework to reflect the actual decision-making situation as much as possible by allowing individuals to have their own sets of alternatives. Since individual sets of alternatives are varied in nature, Arrow's framework is not satisfied in general because a social ordering of all alternatives does not normally exist. Therefore, it may be concluded that Arrow's impossibility result holds not only in theory but also in reality. This conclusion may open up a way to manage an illogical social decision such as cyclical decision-making and strategic negotiation, among others which are popular and effective in actual decision-making.
| Original language | English |
|---|---|
| Pages (from-to) | 398-412 |
| Number of pages | 15 |
| Journal | International Journal of Economics and Business Research |
| Volume | 13 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 2017 |
Fingerprint
Keywords
- Arrow's impossibility theorem
- Illogical social decision
- Inclusive set of individual alternatives
- No-existence proof
ASJC Scopus subject areas
- Business, Management and Accounting(all)
- Economics, Econometrics and Finance(all)
Cite this
How well does theory explain reality? - A case of Arrow's impossibility theorem. / Matsumoto, Yasumi.
In: International Journal of Economics and Business Research, Vol. 13, No. 4, 2017, p. 398-412.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - How well does theory explain reality? - A case of Arrow's impossibility theorem
AU - Matsumoto, Yasumi
PY - 2017
Y1 - 2017
N2 - In this paper, we investigate how well Arrow's impossibility theorem, a typical no-existence proof, can explain real human decision-making. Since the conclusion of a no-existence proof is universal, it may also be useful to examine instances of illogical decision-making which are actually handled in reality if an Arrovian approach is seriously considered. Then, we try to modify the framework to reflect the actual decision-making situation as much as possible by allowing individuals to have their own sets of alternatives. Since individual sets of alternatives are varied in nature, Arrow's framework is not satisfied in general because a social ordering of all alternatives does not normally exist. Therefore, it may be concluded that Arrow's impossibility result holds not only in theory but also in reality. This conclusion may open up a way to manage an illogical social decision such as cyclical decision-making and strategic negotiation, among others which are popular and effective in actual decision-making.
AB - In this paper, we investigate how well Arrow's impossibility theorem, a typical no-existence proof, can explain real human decision-making. Since the conclusion of a no-existence proof is universal, it may also be useful to examine instances of illogical decision-making which are actually handled in reality if an Arrovian approach is seriously considered. Then, we try to modify the framework to reflect the actual decision-making situation as much as possible by allowing individuals to have their own sets of alternatives. Since individual sets of alternatives are varied in nature, Arrow's framework is not satisfied in general because a social ordering of all alternatives does not normally exist. Therefore, it may be concluded that Arrow's impossibility result holds not only in theory but also in reality. This conclusion may open up a way to manage an illogical social decision such as cyclical decision-making and strategic negotiation, among others which are popular and effective in actual decision-making.
KW - Arrow's impossibility theorem
KW - Illogical social decision
KW - Inclusive set of individual alternatives
KW - No-existence proof
UR - http://www.scopus.com/inward/record.url?scp=85020449535&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85020449535&partnerID=8YFLogxK
U2 - 10.1504/IJEBR.2017.084382
DO - 10.1504/IJEBR.2017.084382
M3 - Article
AN - SCOPUS:85020449535
VL - 13
SP - 398
EP - 412
JO - International Journal of Economics and Business Research
JF - International Journal of Economics and Business Research
SN - 1756-9850
IS - 4
ER -