The structure of social decision functions (Q761329)

This paper presents a theorem on aggregating individual preferences into one consistent ordering for society. This result is similar to the Arrow Impossibility Theorem, however it makes weaker assumptions. Specifically we do not require that the social preference be transitive but merely that it be acyclic. Acyclicity of preferences is argued to be a necessary and sufficient condition for consistent decision making [see \textit{A. Sen}, Econometrica 45, 53-89 (1977; Zbl 0353.90001)]. Transitivity is not essential for decisions. This limits the relevance of results in transitive social choice for collective decisions. In addition we do not use the Pareto principle which was another of Arrow's assumptions. Unlike Arrow we are not able to conclude that there is a dictator. However even with substantially weaker assumptions than Arrow we are able to conclude that significant elements of dictatorship persist. In summary we show that the nature of social choice will remain very arbitrary and unsatisfactory even if only two of Arrow's assumptions, unrestricted domain and independence of irrelevant alternatives, are imposed. These are the two purely structural assumptions. As far as we know there are no other 'impossibility' theorems with as few assumptions. The proof is based on the theory of directed graphs and uses a result of Bollobas.