Kenneth Arrow: Other

Kenneth Arrow was American economist. Explore interesting quotes on other.
Kenneth Arrow: 74   quotes 1   like

“I want, however, to conclude by calling attention to a less visible form of social action: norms of social behavior, including ethical and moral codes. I suggest as one possible interpretation that they are reactions of society to compensate for market failures. It is useful for individuals to have some trust in each other's word. In the absence of trust it would become very costly to arrange for alternative sanctions and guarantees, and many opportunities for mutually beneficial cooperation would have to be, foregone.”

Kenneth Arrow

Kenneth Arrow, “The Organization of Economic Activity: Issues Pertinent to the Choice of Market versus Non-market Allocation” (1969)
1950s-1960s

Behavior , Failure

“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

Source: 1970s-1980s, The Economics of Information (1984), p. 55

Problem , Decision , Parting

“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

Source: 1970s-1980s, The Economics of Information (1984), p. 55

Optimism , Problem , Decision , Sense

“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

Source: 1970s-1980s, The Limits Of Organization (1974), Chapter 1, Rationality: Individual And Social, p. 23

People

“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

Source: 1950s-1960s, Social Choice and Individual Values (1951), p. 85

Problem , Study , Parting

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

Kenneth Arrow

1970s-1980s, "Rationality of Self and Others in an Economic System", 1986

“There are many other organizations beside the government and the firm. But all of them, whether political party or revolutionary movement, university or church, share the common characteristics of the need for collective action and the allocation of resources through nonmarket methods.”

Kenneth Arrow

Source: 1970s-1980s, The Limits Of Organization (1974), Chapter 1, Rationality: Individual And Social, p. 26

Universe

“Not only is it possible to devise complete models of the economy on hypotheses other than rationality, but in fact virtually every practical theory of macroeconomics is partly so based. The price- and wage- rigidity elements of Keynesian theory are hard to fit into a rational framework, though some valiant efforts have been made. … But if the Keynesian model is a natural target of criticism by the upholders of universal rationality, it must be added that monetarism is no better. I know of no serious derivation of the demand for money from a rational optimization. … The use of rationality in these arguments is ritualistic, not essential.”

Kenneth Arrow

1970s-1980s, "Rationality of Self and Others in an Economic System", 1986

Money , Optimism , Nature , Effort

“I then follow up with four major aspects of economic research in the last 60 years, the period of my scholarly activity. One, econometric methodology and practice, is of such fundamental importance that it cannotgo unnoticed, although I played no role in it. With the other three, general equilibrium, dynamic processes, and uncertainty and information, I was more intimately involved.”

Kenneth Arrow

Kenneth Arrow, "Some Developments in Economic Theory Since 1940: An Eyewitness Account" Annu. Rev. Econ. 2009
New millennium

“There are information asymmetries in this story. Health insurance is limping along. It's limited in scope, and then you other consequences. Insurance companies have high premiums to protect themselves. The ones who come to the insurance company are sicker and the people have to pay more. You have adverse selection. You have moral hazard. And the doctor does what's on the safe side -- defensive medicine -- without regard to cost. These are fundamental conditions that make health insurance difficult. You have some things that help. Some doctors understand that they shouldn't abuse the system. But you still see problems in the way doctors behave towards patients. They goof off. Sometimes it's too much work. Some things are difficult and risky to diagnose.”

Kenneth Arrow

quoted in Conor Clarke, An Interview with Kenneth Arrow, Part Two https://www.theatlantic.com/politics/archive/2009/07/an-interview-with-kenneth-arrow-part-two/22279/ (2009)
New millennium

Understanding , Help , Health , People