Books by Kenneth J. Arrow

Arrow takes up the basic question of whether collective choices can reflect individual preferences. The seminal 1950 paper that opens the volume shows that given reasonable conditions that social choices must satisfy to reflect individual preferences, it is impossible to make a choice among alternatives without violating some of the conditions.

The optimization of production under recursive conditions lends itself to general mathematical methods of dynamic programming and optimal control theory. This is the main theme of the essays included in this fifth volume of Kenneth Arrow's Collected Papers.

The tension between what we wish for and what we can get, between values and opportunities, exists even at the purely individual level. A hermit on a mountain may value warm clothing and yet be hard-pressed to make it from the leaves, bark, or skins he can find. But when many people are competing with each other for satisfaction of their wants, learning how to exploit what is available becomes more difficult. In this volume, Nobel Laureate Kenneth J. Arrow analyzes why - and how - human beings organize their common lives to overcome the basic economic problem: the allocation of scarce resources. The price system is one means of organizing society to mediate competition, and Arrow analyzes its successes and failures. Alternative modes of achieving efficient allocation of resources are explored: government, the internal organization of the firm, and the 'invisible institutions' of ethical and moral principles. Professor Arrow shows how these systems create channels to make decisions, and discusses the costs of information acquisition and retrieval. He investigates the factors determining which potential decision variables are recognized as such. Finally, he argues that organizations must achieve some balance between the power of the decision makers and their obligation to those who carry out their decisions - between authority and responsibility.