Kenneth Arrow: Possibility

Kenneth Arrow was American economist. Explore interesting quotes on possibility.
Kenneth Arrow: 74 quotes1 like

“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

in Lives of the Literature, edited by William Breit and ‎Barry T. Hirsch
1970s-1980s

“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

“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

“As is by now well known, attempts to form social judgments by aggregating individual expressed preferences always lead to the possibility of paradox.”

Kenneth Arrow

Source: 1970s-1980s, The Limits Of Organization (1974), Chapter 1, Rationality: Individual And Social, p. 25

“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

“While economic theory in general may be defined as the theory of how an economic condition or an economic development is determined within an institutional framework, the welfare theory deals with how to judge whether one condition can be said to be better in some way than another and whether it is possible, by altering the institutional framework, to achieve a better condition than the present one.”

Kenneth Arrow

Arrow and Hicks (1972) From Nobel Lectures, Economics 1969-1980, Editor Assar Lindbeck, World Scientific Publishing Co., Singapore, 1992 ( online http://www.nobelprize.org/nobel_prizes/economics/laureates/1972/presentation-speech.html) <br class="br">1970s-1980s

“We don't have much time left. We are moving towards temperature increases of around two degrees Celsius, which is going to have consequences in the tropics, and we will loose things like glaciers. That's not a theory; it's happening right now. It's not a prediction; it's happening right now. But you just sightsee near those glaciers. But the glaciers are a big source of water. And on the questions of water, in California we store our water in a snowpack. When that's gone, the rain will be the same but it won't accumulate. With warming temperatures the snowpack will now work. It might be possible to substitute with dams, but that's complicated. This is conjoined with a big energy problem and I think that we really have to encourage development in this area. Just waiting for technological improvement won't work. We need to encourage it.”

Kenneth Arrow

quoted in Conor Clarke, An Interview with Kenneth Arrow, Part Three https://www.theatlantic.com/politics/archive/2009/07/an-interview-with-kenneth-arrow-part-three/22330/ (2009) <br class="br">New millennium