Social Choice Theory - Definition
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What is Social Choice Theory?
Social choice theory analyzes individual interests, opinions, and preferences and how they affect collective outputs and decisions. More specifically, this theory is a combination of economic models derived from the aggregation of individual judgments, inputs, preferences, and interests in arriving at collective decisions and judgments.
For a rule to be considered as a 'good rule', it must factor in the decisions, opinions, and judgments of individuals affected.
Back to: Management & Organizational Behavior
A Little More on What is Social Choice Theory
The social spice theory was developed in 1951 by an Economist Kenneth Arrow in his book Social Choice and Individual Values.
According to Kenneth Arrow, a democratic society must reflect the choices and judgments of individuals when developing a role. The economist proposed five criteria that collective our society's choices must meet before they can reflect the preferences of individuals. They are:
- Independence of Irrelevant Alternatives.