Kenneth Arrow quotes - page 2

Kenneth Arrow was an American economist and mathematician, widely recognized for his fundamental contributions to welfare economics and social choice theory. His work, including Arrow's Impossibility Theorem, has had a profound impact on modern economic thought. He was awarded the Nobel Memorial Prize in Economic Sciences for his pioneering achievements. Here are 55 of his quotes:

Studying oneself is not the most comfortable of enterprises. One is caught between the desire to show oneself in the best possible light and the fear of claiming more than one's due.

Kenneth Arrow

The formal structure of a decision problem in any area can be put into four parts: ( 1 ) the choice of an objective function denning the relative desirability of different outcomes; (2) specification of the policy alternatives which are available to the agent, or decisionmaker, (3) specification of the model, that is, empirical relations that link the objective function, or the variables that enter into it, with the policy alternatives and possibly other variables; and (4) computational methods for choosing among the policy alternatives that one which performs best as measured by the objective function.

Kenneth Arrow

Decision theory, as it has grown up in recent years, is a formalization of the problems involved in making optimal choices. In a certain sense - a very abstract sense, to be sure - it incorporates among others operations research, theoretical economics, and wide areas of statistics, among others.

Kenneth Arrow

Trust is an important lubricant of a social system. It is extremely efficient; it saves a lot of trouble to have a fair degree of reliance on other people's word. Unfortunately this is not a commodity which can be bought very easily. If you have to buy it, you already have some doubts about what you have bought.

Kenneth Arrow

From the point of view of seeking a consensus of the moral imperative of individuals, such consensus being assumed to exist, the problem of choosing an electoral or other choice mechanism, or, more broadly, of choosing a social structure, assumes an entirely different form from that discussed in the greater part of this study.

Kenneth Arrow

Certainly, there is no general principle that prevents the creation of an economic theory based on other hypotheses than that of rationality.

Kenneth Arrow

The idealist doctrine then may be summed up by saying that each individual has two orderings, one which governs him in his everyday actions, and one which would be relevant under some ideal conditions and which is in some sense truer than the first ordering. It is the latter which is considered relevant to social choice, and it is assumed that there is complete unanimity with regard to the truer individual ordering.

Kenneth Arrow

It is this thinking which I think gives rise to the greatest tragedies of history, this sense of commitment to a past purpose which reinforces the original agreement precisely at a time when experience has shown that it must be reversed.

Kenneth Arrow

I am old-fashioned enough to retain David Hume's view that one can never derive "ought” propositions from "is” propositions. The two issues, method and value, are distinct.

Kenneth Arrow

I want to stress that rationality is not a property of the individual alone, although it is usually presented that way. Rather, it gathers not only its force but also its very meaning from the social context in which it is embedded.

Kenneth Arrow

In this aspect, the case for democracy rests on the argument that free discussion and expression of opinion are the most suitable techniques of arriving at the moral imperative implicitly common to all. Voting, from this point of view, is not a device whereby each individual expresses his personal interests, but rather where each individual gives his opinion of the general will.

Kenneth Arrow

L. Walras first formulated the state of the economic system at any point of time as the solution of a system of simultaneous equations representing the demand for goods by consumers, the supply of goods by producers and the equilibrium condition that supply equal demand on every market.

Kenneth Arrow

The choice among these alternatives in any given case depends on the degree of difficulty consumers have in making the choice unaided, and on the consequences of errors of judgment. It its the general social consensus, clearly, that the laissez-faire solution for medicine is intolerable. The certification proposal never seems to have been discussed seriously.

Kenneth Arrow

My research, even before 1972, moved in directions beyond those cited for the Nobel Memorial Prize. Most of it, in one way or another, deals with information as an economic variable, both as to its production and as to its use.

Kenneth Arrow

The major driver of economics is the equilibrium approach, which has taken various forms over the years. General equilibrium is the statement that all the different parts of the economy influence each other, even if it's remote, like mortgage-backed securities and their demands on automobiles.

Kenneth Arrow

Krugman's whole attack is directed at a statement made neither by Arthur nor by Cassidy. Krugman has not read Cassidy's piece with any care nor has he bothered to review what Arthur has in fact said.

Kenneth Arrow

I don't know which way human psychology will go wrong. We have a world in which there is uncertainty. There are new technologies. And one of the problems is that we do things today with a thought to the future. Any purchase is one for the future. If you buy a refrigerator you are making a commitment to the future, so that you have food to eat for the next ten years. That's a simple theory, one of many simple theories -- theories that people agree on and that don't, in a fundamental way, change. But every once in a while there is unemployment, and wages will drop, and there will be several different interpretations.

Kenneth Arrow

Evolutionary theory tends to explain quite well in retrospect how various species emerged. It's not very good on prediction. Nevertheless, one cannot say that there isn't a lot of knowledge that's been obtained in this field. In the same way, with these complex physical phenomena between solid state physics, you can say a lot of things without necessarily knowing the next step.

Kenneth Arrow

Unsolved problems, that's one of the great signs of progress in my opinion.

Kenneth Arrow

Now virtue may not always be its own reward, but in any case it is not usually bought and paid for at market rates.

Kenneth Arrow

One thing I learned from meteorology is that being an actual science was no guarantee of exactness.

Kenneth Arrow

Education is still, in spite of private education, a state matter.

Kenneth Arrow