1 s2.0 S1574011002800054 Main

Chapter I
IMPOSSIBILITY THEOREMS IN THE

ARROVIAN FRAMEWORK
DONALD E. CAMPBELL*
The College of William and Mary
JERRY S. KELLY'
Syracuse University
Contents
Abstract 36
Keywords 36
1. Introduction 37
2. Definitions and framework 39
3. Fundamental lemmas and Arrow's theorem 43
4. Relaxing the Pareto criterion 52
5. Relaxing transitivity 57
6. Relaxing the domain condition 64
7. Relaxing independence of irrelevant alternatives 70
8. Modifications of the Arrovian framework 75
9. Concluding remarks 84
References 85
* We thank John Weymark and the Pacific Institute of Mathematics for the opportunity to present an
early draft of this paper at their 1998 workshop at the University of British Columbia. And we are
extremely grateful to the editors of this Handbook for comments on a previous draft.
Handbook of Social Choice and Welfare, Volune 1, Edited by KS Arrow, A.K. Sen and K. Suzumura
©3 2002 Elsevier Science B. V All rights reserved
36 D.E. Campbell and J.S. Kelly
Abstract
Given a set of outcomes that affect the welfare of the members of a group, K.J. Arrow
imposed the following five conditions on the ordering of the outcomes as a function of
the preferences of the individual group members, and then proved that the conditions
are logically inconsistent:
* The social choice rule is defined for a large family of assignments of transitive
orderings to individuals.
* The social ordering itself is always transitive.
* The social choice rule is not dictatorial. (An individual is a dictator if the social
ordering ranks an outcome x strictly above another outcome y whenever that
individual strictly prefers x to y.)
* If everyone in the group strictly prefers outcome x to outcome y, then x should rank
strictly above y in the social ordering.
* The social ordering of any two outcomes depends only on the way that the individuals
in the group order those same two outcomes.
The chapter proves Arrow's theorem and investigates the possibility of uncovering a
satisfactory social choice rule by relaxing the conditions while remaining within the
Arrovian framework, which is identified by the following five characteristics:
· The outcome set is unstructured.
· The society is finite and fixed.
* Only information about the ordering of the outcome set is used to convey information
about individual welfare.
* The output of the social choice process is an ordering of the outcome set.
* Strategic play by individuals is not considered.
Keywords
Arrow, impossibility, information, Pareto, trade-off
JEL classification: D6, D7

Ch. 1: Impossibility Theorems in the Arrovian Framework 37
1. Introduction
Arrow's Theorem [Arrow (1950, 1951, 1963)] on the aggregation of individual

preferences is so startling, and robust, and significant that it spawned a new branch
of social studies, called social choice theory. Given a set of outcomes that affect the
welfare of the members of a group, K.J. Arrow proposed a handful of simple conditions
on the ordering of the outcomes as a function of the preferences of the individual group
members, and then proved that the conditions are logically inconsistent. His theorem is
valid whether the group is large or small - the citizens of a country, or a two-member
committee, at the extremes. In isolation, each criterion seems appropriate, even mild,
in many contexts. (For example, one requires that if everyone in the group prefers
outcome x to outcome y then x should be above y in the social ranking.) However,
Arrow proved that there exists no social (or group) choice procedure that satisfies all
of them. This chapter examines that theorem, and related results. Sen (1986) provides
a thorough review of the first thirty-five years of social choice research, and the other
chapters in this Handbook touch on many of the issues raised by Arrow (1963). Our
aim here is to provide insight into key results within the "Arrovian Framework" which
is identified by the following five characteristics:
* The outcome set is unstructured.
* The society is finite and fixed.
* Only information about an individual's ordering of the outcome set is used to convey
information about that individual's welfare.
* The output of the social choice process is an ordering of the outcome set.
* Strategic play by individuals is not considered.
The remainder of the introduction explains these five properties in more detail.
First, the set X of alternatives is unstructured, to give the results an extremely wide
set of applications. Other important strands of the social choice literature impose
a topological or algebraic structure on X - see Le Breton and Weymark (2002a),
who treat economic environments, and Baigent (2002) on topological social choice -
Chapters 16 and 17, respectively, in Volume 2 of this Handbook.
Second, there is a finite set N of "individuals", which is fixed in this chapter.
Typically, the members of N are different people, who have preferences over the
alternatives in X. Smith (1973) and Young (1974) have some interesting results for
variable electorates, and Blackorby, Bossert and Donaldson (1995) treat social choice
problems for which population size, among other things, varies across states. Fishburn
(1970) showed that Arrow's theorem doesn't hold with infinitely many individuals,
although Kirman and Sondermann (1972) prove something close to Arrow's theorem
for infinite N. There are other interpretations of N. For example, X is a set of
restaurants and N={1,2, 3}, denoting menu, location, and ambience, respectively.
Preference scheme 1 orders the restaurants according to the menus, preference
scheme 2 orders them by location, and the third lists the members of X by ambience.
For each attribute, the ranking reflects the tastes of a single individual. [See May
(1954) and Arrow and Raynaud (1986) on multicriteria decision making]. Dutta and
38 D.E. Campbell and .S. Kelly
Sen (1996) treat the members of N as labels for the different criteria by which one
evaluates opportunity sets. For instance, criterion 1 ranks opportunities in terms of the
highest level of attainable utility, and criterion 2 bases the ranking on the size of the
opportunity set. One then asks if there is a reasonable way of aggregating the different
orderings into a summary ranking of opportunity sets.
Third, social choice is sensitive only to the ordinal properties of individual
preference. Specifically, the informational base for a social choice procedure is a
family of profiles, where a profile is an assignment of a preference over X to each
individual in N. The input to the social choice procedure is a profile. Consideration of
cardinal utility or interpersonal comparisons is omitted here and the reader is referred
to d'Aspremont and Gevers (2002, Chapter 10 in this Volume). More generally,
intensity of preferences is not taken into consideration. Also omitted is the use of
non-preference information like rights. Sen (1970b) introduced this topic into modern
social choice theory with a very striking impossibility theorem of his own. On this see
Suzumura (2002, Chapter 19 in Volume 2 of this Handbook). Sen (1977) pointed out
that when social choice is sensitive only to the ordinal part of individual preference
we are employing a specific invariance condition, drawn from a very wide family of
invariance conditions: specifically, the output of the social choice process is invariant
to transformations of the inputs that do not affect the ordinal part of individual
preferences. See Sen (1999, 2002, Chapter 14 in Volume 2 of this Handbook) for strong
skepticism about this assumption. Bossert (2000) presents a number of theorems on the
algebra of generalized invariance conditions. Roberts (1997) analyzes the problem of
aggregating a set of individual interpersonal comparisons into a summary interpersonal
comparison.
Fourth, the output of a social choice procedure is an ordering of the alternatives
in X, called a social ordering, rather than the selection of one or more members of
X. Moreover, this chapter only offers a few highlights of the literature that allows the
input (the individual preferences) or the output (the social ordering) to be uncertain
or fuzzy. Salles (1998) surveys fuzzy social choice. Various aspects of uncertainty in
social choice are surveyed in three of the chapters in this Handbook: Chapter 10 by
d'Aspremont and Gevers (2002), Chapter 11 by Blackorby, Bossert and Donaldson
(2002), both in this Volume, and Chapter 24 by Coughlin (2002), in Volume 2.
Section 8 below contains a sketch of the literature on rules that select a subset of X
as a function of individual preferences, instead of socially ordering X. Deb (2002,
Chapter 18 in Volume 2 of this Handbook), provides a thorough treatment. See also
Le Breton and Weymark (2002a, Chapter 16 in Volume 2 of this Handbook).
Fifth, preference revelation is non-strategic. We do not discuss what happens when
"the ideals of the just society meet with the play of self interest" [Arrow (1997)].
The potential for individual preference misrepresentation was already recognized by
Arrow in 1951 [p. 7 of Social Choice and Individual Values]. However, the strategic
and non-strategic aspects of social choice can be dealt with separately. We can
discuss various sets of conditions, and deduce how each set constrains the social
choice process - as we do in this chapter. Then we can analyze how the requirement
Ch. 1: Impossibility Theorems in the Arrouian Framework 39
that an individual be unable to profit from strategic misrepresentation of his or her

preference constrains the social choice process - as in BarberA (2002, Chapter 23
in Volume 2 of this Handbook), and Fishburn and Brams (2002, Chapter 4 in this
Volume). Finally, we can identify the social choice rules that come closest - in a
sense that would need to be specified - to satisfying both types of constraints. The
purpose of this chapter is to deduce the implications of a set of conditions that do
not reflect strategic considerations. Sen (1986, 1987), Moulin (1994), and Pattanaik
(1997) also provide surveys of non-strategic social choice in the Arrovian framework.
Thomson (2001) is an excellent general survey and exposition of the axiomatic method
in economics.
2. Definitions and framework
X is the set of all alternatives or outcomes. It has at least two members. We use IX I
to denote the cardinality of X, and if Z is a subset X then X \ Z is the complement
of Z in X. A binary relation ~ on X is a comparison of the members of X two at
a time, thus: x tSy. The statement x t y is read "x is weakly preferred to y", or "x is
preferred or indifferent to y". If x y and y t x both hold we write x -y, and say that
"x is indifferent to y".
A binary relation > on X is complete if for all x, y C X, either x t y or y t x holds.
Note that a complete relation is reflexive, which means that x x holds for each x E X.
The asymmetric part of t is denoted by >-, so x >-y if and only if x t y holds but y t x
does not. When x >-y we often say that x is strictly preferred to y, or that x ranks strictly
above y in . We say that t is transitive if for all x, y, and z in X, if x t y and y z
then x z. We often write x y z to indicate that x y and y z both hold. We
say that a complete and transitive relation t is an ordering. We sometimes use other
symbols, such as R, to denote an ordering. For any Y C X we can define an ordering
on Y in the obvious way, and we let P(Y) denote the set of orderings on Y.
A transitive relation t cannot have x t y t z >-x because z >-x cannot hold ifx i z.
Moreover, if t is complete and we never have x t y t z >-x then:
x >-y z implies x >-z.

x y >-z implies x >-z.
x >-y >-z implies x >-z.
x -y - z implies x z.
We say that the binary relation t on X contains a cycle if we have xl > x2 - .-.
>- XT >- X for some choice of x,x 2 ,... ,XT from X. Why are cycles an issue when we
use a binary relation on X to identify one or more best alternatives in X? Because if
X = Xl, X2 .... , XT} and xl, -X2 > · >- XT X then X contains no "best alternative"
if best alternative means an outcome a in X such that a t b for all b E X. In general,
transitivity is sufficient but not necessary for the existence of a best alternative. See
40 D.E. Campbell and JS. Kelly
Suzumura (1983) for a thorough treatment of binary relations and choice. Transitivity
and related properties can be derived from various formalizations of the desire to avoid
computational complexity or burdensome information processing costs: see Campbell
(1975), Beja (1989), and Johnson (1990, 1995), for instance.
It is often useful to employ a model in which an individual is never indifferent
between distinct alternatives, in which case we say that the preference ordering is
linear. Formally, we say that the complete binary relation Z is antisymmetric if for
all x, y EX, x y and y x imply x=y. A binary relation is a linear ordering if
it is complete, transitive, and antisymmetric. Let L(Y) denote the family of linear
orderings on Y.
The inverse R-l of the binary relation R is defined by setting xR- y if and only if
yRx (for arbitrary x and y). Note that R -t is antisymmetric (or complete, or transitive,
or linear) if and only if R is. The restriction of binary relation R on X to the subset Y
of X is denoted R Y. We define R Y by setting xR Yy if and only if xRy and x and
y belong to Y.
The set N of individuals whose preferences are to be consulted is the finite set
{1,2,. .. , n with n > 1. If J is a subset of N, the set of individuals in N but not in J
is denoted by N \ J. A domain is some non-empty subset P of P(X)N. A member p
of P(X)N is called a profile, and it assigns the ordering p(i) to individual i e N, where
p(i) is interpreted as i's preference ordering at profile p. If S is a subset of P(X), then
a member p of SN is a profile for which p(i) belongs to S for each i E N. A social
welfare function for outcome set X and domain P9 is a functionf from P into the set
of complete binary relations on X. We say that has a full domain if either P = P(X)v
or P=L(X) .
Given social welfare function f on domain P, if f(p) is transitive for each p eP
we say that f is transitive-valued. For each p E P, f(p) is interpreted as the social
ranking of X determined byf when individual preferences are specified by p. We will
often use ti to represent p(i). Then x ij indicates that individual i weakly prefers x
to y at profile p. If there is some danger of confusion with individual preference
at another profile, we will write x iy to indicate that person i weakly prefers x
to y at profile p. Similarly, x -iy means that i strictly prefers x to y, with x >-i Y
if necessary, to indicate that i strictly prefers x to y at profile p. Of course, x -iy
means that individual i is indifferent between x and y, with x -Py if it is necessary
to clarify the fact that p is the profile in question. We will let ~ represent f(p), so
that x y means that x ranks at least as high as y in the social relation determined
by f at p. If we have to distinguish profile p from another profile then we write
x f( p) y, x S>-(p) Y, and x f(p) y for, respectively, x ranking at least as high as y inf(p),
x ranking strictly higher than y in f(p), and neither alternative ranking above the
other in f(p).
We next introduce standard restrictions on the domain P of a social welfare
function f. First, we define p Y, the restriction of profile p to the subset Y of X.
It is the function that assigns the ordering p(i) Y to arbitrary i EN. P(Y) is the
set of profiles p E p(y)N such that there is some r P for which p = r Y. That is,
P(Y) = {r IY: r E P}. Given the domain P, we say that a triple {x,y, z} of alternatives
is free if either
(A) P({x, y, z}) = P({x, y, z})N or (B) P({x, y,z)}) = L({x,

L(x,y,y, })N.
In words, statement (A) means that every profile of orderings on {x,y, z} is embedded
in some profile in P. We say that P has the free triple property if X has at least three
alternatives and every triple from X is free. We adopt the convention that whenever
we display a set {x,y,z,... } we mean that the alternatives are distinct. Similarly,
"pair" will mean a set containing two distinct alternatives and "triple" will mean a set
containing three distinct alternatives. All of the theorems to follow that hypothesize
a free triple domain, are valid if either (A) or (B) is used to confirm the free triple
property. The following is an example of a free triple domain that is a proper subset
of L(X)N:
Example 2.1. X= {w,x,y,z} and P7= WN, where W is the set of linear orderings R
on X such that w is not a maximal or minimal element of R. Use condition (B) to
confirm that this domain has the free triple property. ·
The following condition, due to Kalai, Muller and Satterthwaite (1979), is weaker
than the free triple property. We say that P has the chain property if IX I >3
and for every two ordered pairs (x,y) and (w,z) of alternatives in X, there exists
an integer k and a sequence vl,v2,.. , vk such that all of the triples {x,y, vl},
{y, vI,U2},
v2} , v2, v3 },..., {Vk, w,z} are free. Kalai, Muller and Satterthwaite use the
term saturating, which is equivalent to the chain property if every pair of alternatives
is free. (To define a free pair just replace {x,y,z} with {x,y} in definition (A) of a free
triple). But Kalai, Muller and Satterthwaite are concerned with economic domains in
which there are pairs {x,y} such that x gives everyone more of every good than y, and
hence every individual strictly prefers x to y at every profile in the domain. A pair
{x,y} of alternatives is called trivial if p {x,y} = r {x,y} for any two profiles p and r
in the domain. A domain is saturating if there are at least two non-trivial pairs, and for
any two non-trivial pairs {x,y} and {w,z} there is a sequence of free triples connecting
them. The chain property plays a central role in this chapter.
One special consequence of the chain property we will use later is that, given any
pair {x,y} of alternatives, there exists an alternative z such that {x,y,z} is a free triple.
There are domains that have the chain property but not the free triple property:
Example 2.2. X contains more than three alternatives and a is a particular element
of X. Let R be a fixed linear ordering on X \ {a}. The domain P consists of all
profiles r of linear orderings such that each r(i) restricted to X \ {a} is either R or its
inverse R- '. (The position of a in r(i) is unrestricted, except that it cannot be indifferent
to another alternative). P does not have the free triple property, but it does have the
chain property: given (x,y) and (w,z), if {x,y,a}, {y,a,w}, and a,w,z} each have
three members then each is a free triple. (If one or more of the sets contains fewer
than three alternatives then there is a shorter chain). ·
Our examples will feature domains that are product sets, but this is not required by
the theorems that hypothesize free triples or chains of free triples. For instance, the set
of all profiles in L(X) N such that all individuals have the same top ranked alternative
has the free triple property if X has more than three members, but it is not a product set.
Of special importance are the domains of economic preferences, where the convexity
and monotonicity assumptions are incompatible with the free triple property, but chains
of free triples abound. Le Breton and Weymark (2002a, Chapter 16 in Volume 2 of
this Handbook) explore such preferences in depth.
The key lemmas in the next section use free triples to justify the existence of certain
profiles that are related to other profiles. For example, let q be any profile, let J be
any subset of N, and let p be any profile for which x >- z for all j E J. If {x,y,z} is a
free triple, there exists a profile r such that
r I{x,z} =p {x,z}, and r {y, z} = q {y, z}, and x - y for all J
To verify this, we first create s(i) from p(i) by sliding y up or down so that it is
indifferent to z in s(i) if it is indifferent to z in q(i), andy is strictly above (resp., below)
z in s(i) if it is strictly above (resp., below) z in q(i). Because x >Pz for allj E J, we
can do this while satisfying x y for all j E J. The profile s will have the required
properties, but it does not necessarily belong to the domain. However, if {x,y,z} is free
then there will be some profile r in the domain such that r {x,y,z} =s {x,y,z}. This
means that r I{x,z} =p {x,z}, r I{y,z} = q {y,z}, and for all j C J we have x strictly
preferred to y in r(j).
We next introduce some restrictions on the social welfare function. These elementary
conditions partially describe the way that we want the social ordering to be sensitive
to individual preferences.
Pareto criterion. For every p E P and all x,y EX, we have x >-f(p)y if x >-Py for all
ioN.
In words, if everyone ranks alternative x strictly above alternative y then x must rank
above y in the social ordering. In an economic context, this condition is used to
eliminate every conceivable type of waste. By definition, there is waste somewhere if it
is possible to rearrange production and consumption activities so as to make everyone
better off. Note, however, that the Pareto criterion is well defined for any X and P. It is
a generalized non-wastefulness condition, and is often called the weak Pareto criterion
in the social choice literature.
Later in this chapter we will need to consider relaxing Pareto. For example,
nonimposition requires that there is some profile p at which x ranks at least as high
as y (but not necessarily higher than y) in the social ordering f(p).
Nonimposition. For all x,y EX, there exists some p E P such that x tfj(p)y.
Note we can have both x >f(p)y and y /(p) x, in which case neither y (-/(p)x nor
x >-f(p)y holds. In fact, nonimposition is satisfied by the null rule, which puts every al-
ternative indifferent to every other alternative in the social ordering at each profile. The
Pareto criterion implies thatf is not null (unless the domain is severely restricted), but
Pareto is obviously much stronger in general than the requirement thatf is non-null.
Non-null. There exist x,y EX and p E P such that x >f (p)y.
Our next condition, Independence of Irrelevant Alternatives (IIA), is quite different
in spirit from the Pareto, or nonimposition, or non-null criteria, each of which requires
some responsiveness to individual preferences on the part of the social welfare
function. IIA requires the social ordering of x and y to be the same in two situations
if, person by person, the individual ordering of x and y is the same in those two
situations:
IIA. For all p,q E P and all x,y EC X, ifp {x,y} = q I x,y} thenf(p) I x,y} =f(q) I x,y}.
When IIA is satisfied we can define the social welfare functionf I Y, the restriction of
f to an arbitrary non-empty subset Y of X. The domain forf I Y is P(Y), andf IY is
the social welfare function mapping P(Y) into P(Y) and such that the image off I Y
at profile p is f(r) I Y, for any r E P such that r Y =p. IIA is an interprofile condition
because it restricts the social ordering at one profile in a way that is in part conditional
on how it restricts the social ordering at another profile - or profiles. Fishburn (1987)
surveys interprofile conditions and their connection with social choice impossibility
theorems.
3. Fundamental lemmas and Arrow's theorem
The notion of a decisive coalition lies at the heart of the analysis to follow. A coalition
is a subset of N, the society. Informally, J C N is decisive if the members of J
can determine the social ordering whenever they exhibit unanimous strict preference,
whatever the alignment of preferences of the complementary coalition, N \ J. Formally,
coalition J C N is decisive for the ordered pair (x,y) E X xX if, for all p E P, x >-Py
for allj E J implies x >-f(p) y. J is decisive if it is decisive for all pairs. Coalition J C N
is inversely decisive for (x,y)EXxX if, for all pCG , x -y for all j eJ implies
y -f(p)X. J is inversely decisive if it is inversely decisive for all pairs. Of course,
the families of decisive and inversely decisive coalitions depend on f. Individual h
is a direct dictator, and the social welfare function is directly dictatorial, if h} is
decisive. Similarly, individual h is an inverse dictator if h} is inversely decisive.
A social welfare functionf is non-dictatorial if it does not have a direct dictator.
As the next two paragraphs reveal, whether or not a trio of decisive coalitions has a
non-empty intersection determines if an intransitive social ordering can be precipitated.
Hence, the structure of the family of decisive coalitions plays a key role.
Example 3.1. Majority rule: In this case a coalition is decisive if it has more than
n/2 members, where n is the cardinality of N. In the case of majority rule, three
decisive coalitions H, I, and J can have an empty intersection. For instance, if N
has five members, take H={1,2,3}, I = 1,4,5}, and J= 2,4,5}. Then there will be a
44 D.E. Campbell and AS. Kelly
cycle x >-y >-z >-x at a profile p for which everyone in H prefers x to y, everyone in I
prefers y to z, and everyone in J prefers z to x. We have x - y because H is decisive,
y >-z because I is decisive, and z >-x because J is decisive. A
Now, let f be any social welfare function. If there are three nonempty decisive
coalitions H, I, and J with an empty intersection and there is at least one free triple
{x,y,z} thenf (p) will have a cycle for some p. Consider the following profile p:
HnJ H\J N\H
z x y
x y z
y z x
(One of the coalitions H nJ, H \ J, or N \ H might be empty. The table has the
obvious interpretation: every individual in the coalition H n J strictly prefers z to x
and x to y, everyone in H \ J strictly prefers x to y and y to z, and everyone not in H
strictly prefers y to z and z to x. The individual orderings of the pairs not in {x,y,z} are
irrelevant to the argument, and hence are not displayed.) At profile p we have x >-y
because H is decisive and everyone in H strictly prefers x to y. Because (H n J) n I
is empty, we also have y >-z because I is decisive and everyone in I (everyone in
N \ (H J) in fact) strictly prefers y to z. Finally, we have z >-x because J is decisive
and everyone in J strictly prefers z to x at p. Therefore, fJ(p) contains the cycle
x-yb-z>-x.
We will see that transitivity of the social ordering, along with Pareto and IIA, forces
a great deal of structure on the set of decisive coalitions. This structure in turn will
imply that the social welfare functionf is dictatorial. We begin our investigation by
proving that nonimposition, IIA, and transitivity of eachf(p) cause decisiveness over
a single pair of alternatives to spread to all pairs. That puts a severe and regrettable
constraint on the construction of a social choice rule.
The contagion lemma. X is any set with at least three alternatives and P C P(X)N is
a domain with the chainproperty. If social welfarefunctionf on P is transitive-valued
and satisfies IIA and nonimposition, then
(1) any coalition J C N that is decisive for some pair of alternatives is decisive for
every pair of alternatives, and
(2) any coalition J C N that is inversely decisive for some pair of alternatives is
inversely decisive for every pair of alternatives.
Proof: We will prove statement (1). Statement (2) can be proved in the same way. We
first show:
(a) If {x,y,z} is a free triple in X and J is decisive for the pair (x,y) then J is decisive
for (x,z).
Let p be any profile for which x -P z for all j E J. We want to show that x (p) Z. By
nonimposition, there is a profile q for which y f( q)z. Since {x,y,z} is a free triple,
there exists a profile r such that
rl {x,z} =pi {x,z}, and r {y,z} = q {y,z}, and x -jy for allj C J
Then we have x >f(r)y by decisiveness of J for (x,y), andy tf (r) z by IIA. Then x >f(r) z
becausef(r) is transitive. Therefore, x >-f(p) z by IIA, and thus J is decisive for (x,z).
For the second step we show:
(b) If {x,y,z} is a free triple and J is decisive for the pair (x,y), then J is
decisive for (z,y).
Suppose z>-Py for all jJ at a profile p. We want to show that Z>f(p)y.
Nonimposition implies that there is a profile q for which z f(q)x. Since {x,y,z} is
a free triple, there is a profile r such that
rl {y,z} =pl {y,z}, and r {x,z} = q x,z}, and x >jy forallj J

Then we have z tf(r) x by IIA and x >-f(,-) y by decisiveness of J for (x,y). Then z Tf(r) y
becausef(r) is transitive. Therefore, z >-(p)y by IIA, and thus J is decisive for (z,y).
Now suppose {x,y,z} is a free triple and J is decisive for the pair (x,y). By (a), J
is decisive for (x,z), and (b) implies that J is decisive for (z,y). Statement (a) and the
decisiveness of J for (z,y) imply that J is decisive for (z,x). Then from J's decisiveness
for (z,x), we can show J is decisive for (y,x) by (b) and from that, J is decisive for
(y,z) by (a). Hence, if J is decisive for one ordered pair from a free triple, it is decisive
for every ordered pair from that triple.
Finally, suppose J is decisive for the pair (x,y) from X, and let (u, v) be any other
pair. By the chain property, there is a sequence vl, v2,... , k such that all of the
triples {x,y, v }, {y, vi,},v} vi, 2, 3}, ... {Vk, , v} are free. Since J is decisive for
(x,y) and {x,y,vl} is free, J is decisive for (y,vo). Since J is decisive for (y,ul)
and {y,vl,v 2} is free, J is decisive for (vl, 2). Continuing along this sequence, we
establish the decisiveness of J for (u, v). 1
Because there are two tests for a free triple domain, depending on whether or
not individual indifference is assumed away, there are two results in the contagion
lemma. One applies to social welfare functions with domain P C L(X)N, which means
that individuals are never indifferent between distinct alternatives; the other allows
individual indifference.
Now we use a series of examples to highlight the role of each of the assumptions
in the hypothesis of the contagion lemma. Each example presents a social welfare
function that satisfies all but one of the assumptions, and it identifies a coalition that
is decisive for at least one pair but not all pairs. First, we will see why the assumption
that X has at least three members is crucial.
Example 3.2. X = {x,y}. Definef on P(X)N by setting x >-y unless y >-i x for all i E N,
in which case y >-x. When IX = 2, transitivity and IIA are satisfied vacuously. This
46 D.E. Campbell and JS. Kellyv
rule f clearly satisfies Pareto, and hence nonimposition. Note that {i} is decisive for
(x,y) for all i e N, but N is the only decisive coalition for (y,x). We don't get contagion
of {i} forX = {x,y} because we don't have a third alternative z to act as a "carrier". Sen
(1976) coined the term "Paretian epidemic" to refer to the transmission of decisiveness
for a pair to global decisiveness. Kelsey (1988) provides considerable insight into the
transmission mechanism. ·
Nonimposition is an important assumption in the contagion lemma, as the next
example shows:
Example 3.3. X has at least three alternatives. Partition X into two nonempty
subsets Y and Z. To define f we let p be an arbitrary profile in P(X)N: set y >- (,) z
for all y in Y and all z in Z, and letf (p) order the members of Y exactly as p(l) does,
with the members of Z ordered according to p(2). The singleton { I } is decisive for
any pair from Y, but no coalition is decisive for (z,y) if z C Z and y C Y. Of course,
f fails to satisfy nonimposition because we never have z l(p) y if y belongs to Y and
z belongs to Z. U
Next we illustrate that IIA is crucial:
Example 3.4. Choose a particular pair of alternatives v and w, and definef on P(X) '
by setting f(r)= r() if v >- w, otherwise f(r)=r(2). Coalition 1} is decisive only
for the pair (v, w). IIA fails because X has more than two alternatives, and we have
v >f(,)z if v >-' w -' z and z>-w >- u, but z >l(p)v if w >-v> z and z >- w - v.
Note that p I {v, z}= r {v, z} ifp(i) = r(i) for all i > 2.
The next example illustrates the need for the assumption that the social ordering is
always transitive:
Example 3.5. Choose a particular pair of alternatives v and w, and define f
on P(X)N by setting f(r)]{v,w}=r(l){v,w}. For all other pairs {x,y}, we set
fJ(r) I x,y} = r(2) I{x,y}. Then coalition {1 } is decisive for (v,w) and (w, v) but for no
other pairs. It is easy to see whyf(r) is not always transitive: if v - I w and w >2 Z -2 U
then we have v >-w >-z >-v.
Finally, we use an important example of Blau (1957) to show why the chain property
is assumed.
x
Example 3.6. X = w,x,y,z}. The domain P is the set of all profiles p in L(X)@ such
2
that w is at the top of p(l) and at the bottom of p( ), and we set f(p) I {x,y,z} =
p(l) I{x,y,z}, with w at the bottom off(p). Person 1 is decisive for any pair from
{x,y,z}, but not for (w,v) for any choice of v {x,y,z}. Note that {x,y,z} is a free triple,
but there is no free triple containing w, so the chain property fails. U
The contagion result places regrettable restrictions onf. For example, a society may
want coalition J to be decisive for the specific pair (x,y) if alternative x can be derived
from y by having the members of J exchange private commodities among themselves.
But the hypothesis of the contagion lemma causes J's decisiveness over (x,y) to spread
to all pairs, even those pairs (w,z) such that alternative w can be derived from z by
having the members of N \ J exchange private commodities among themselves. This
may be far from socially acceptable. We will see that Arrow's conditions are even more
demanding - impossibly demanding.
Clearly, from the definitions of decisiveness and inverse decisiveness, if coalition H
is decisive (resp., inversely decisive) and H C J C N, then J is decisive (resp., inversely
decisive). It follows that either the collection of inversely decisive sets is empty, or the
collection of decisive sets is empty; otherwise N is both decisive and inversely decisive,
and that is not possible if there are two alternatives x and y such that everyone strictly
prefers x to y at some profile.
Assume the conditions of the contagion lemma, which gives us many of the details
of the structure of the collection of decisive sets. First, note that the chain property
implies that every distinct pair of alternatives is contained in some free triple. Now we
show that iff is non-null, either N is decisive or N is inversely decisive. Because f
is non-null, there is a profile r and a pair of alternatives, x and y, such that, x >f(,)Y.
There exists an alternative z such that {x,y,z} is a free triple. Let p be a profile such
that
Pi {x,y} = r {x,y}, and for all i C N, both x >-i z and y >-i z hold.
Because IIA is one of the conditions, if x z then coalition N is decisive for (x,z),
zf(p)
and thus for all pairs by the contagion lemma. That is, N is decisive if x -f(p)z.
Now suppose z f(p)x. IIA implies x -f(p)y, and thus transitivity yields z f(p)y.
Therefore, N is inversely decisive for (y,z) by IIA, and thus N is inversely decisive
by the contagion lemma.
After we prove the next lemma, it will take only a few additional lines to complete
the proof of Arrow's Theorem. The new lemma gives considerable detail on the
structure of the set of decisive coalitions, or the set of inversely decisive coalitions,
whichever is not empty. The nonempty collection is an ultrafilter. An ultrafilter on a
given set N is a collection U of subsets of N with the following four properties:
(1) N eU and0 U.
(2) For arbitrary subsets H and J of N, if H E U and H C J then J G U.
(3) For arbitrary members H and J of U, the set H n J belongs to U.
(4) For arbitrary subset H of N, if H U then N \ H E U.
The set of all supersets of {1,2} has the first three properties, but not the fourth because
neither { 1} nor N \ {1} belongs. The family of all supersets of { I is an ultrafilter.
The ultrafilter lemma. Let X be any set with at least three members. Suppose that
p C P(X)N has the chain property and f is a non-null and transitive-valued social
welfare function satisfying IIA and nonimposition. Then the collection of decisive sets
or the collection of inversely decisive sets - whichever is non-empty - is an ultrafilter.
Proof: We will assume U is a nonempty collection of decisive sets; the proof for
inversely decisive sets is similar.
(1) N e U was established in the remarks just before the statement of the theorem. To
prove 0 C U choose any two distinct alternatives x and y, and any profile r such
that x >-iY for all i in N. (The chain property implies that such a profile exists.)
We have x >-y because NE U. But trivially, y >-ix for all i in 0, and we do not
have y - x, so 0 U.
(2) Suppose that H U, H C J, and x >-iy for all i in J. Then x >-y for all i in H,
and thus x -y because H CU. Therefore, J is also decisive.
(3) Suppose H E U and J E U. We wish to show Hn J E U. By the chain property,
there is a free triple {x,y,z} and a profile p satisfying
HnJ H\J J\H N\(HUJ)
x y z z
y z x y
z x y x
(Some of these sets might be empty.) Atp we have x >-y because J is decisive, and
y >-z because H is decisive. Transitivity of >- implies x >-z. By IIA we have x >-z
at any profile where everyone in H n J prefers x to z and everyone else prefers
z to x.
We have not yet established the decisiveness of H n J because the preferences
of the complementary coalition have been restricted. Accordingly, we let r be any
profile with x >-,y for all i in H n J. Since {x,y,z} is a free triple, there exists a
profile q with
(i) qj {x,y} = rl {x,y}
(ii) x >-I-qz
y for all i in H n J, and
(iii) z >-qy and z >-qx for all i not in HnJ. Then x f(q)z by the previous
paragraph, and z >f(q) y since N is decisive. Therefore x >-f(q) y by transitivity.
Then x >-f(,r)y by IIA. Therefore HnJ is decisive for (x,y) and so by the
contagion lemma, H n J e U.
(4) If H d U, there exists a pair, x and y, and a profile r such that, x >-ry for all i in H
but y ~f(r) x. We will show that N \ H E U. There is a z such that {x,y,z} is a free
triple. Let p be any profile such that y >-P z for all i in N \ H. Because {x,y,z} is
a free triple, there is a profile q such that
q[ {x,y} = rl x,y},ql {y,z} =pl{y,z}, and x >q z for all i in N.
(For iEN \ H, create q(i)l {x,y,z} from r(i) {x,yz} by sliding z down below
x and y. For i E H, slide z below x but duplicate the ordering of y and z in p(i).
Recall that x >- y for all i E H.) We have y f(q) x by IIA and x >-/(q) Z because
N E U. Therefore, y >-f(q) z by transitivity, and then y >-f(p) z by IIA. Then N \ H
is decisive for (y,z), and thus N \ H E U by the contagion lemma. ]
The ultrafilter approach was first applied to the study of Arrow's theorem by Hansson
(1972) and Kirman and Sondermann (1972). They independently proved that the
hypothesis of Arrow's theorem implies, for any nonempty set N, that the family of
decisive coalitions is an ultrafilter. Note that the proofs of the contagion and ultrafilter
lemmas do not depend on finiteness of N. For further discussion of ultrafilters in social
choice, see Brown (1974) and Monjardet (1983).
A handful of examples will highlight the role of each of the assumptions in the
hypothesis of the ultrafilter lemma. We could employ Examples 3.2 through 3.6, used
to examine the hypothesis of the contagion lemma, but this new series will provide
more insight into the role of the assumptions in the ultrafilter lemma. Each of the
following social welfare functions satisfies all but one of the assumptions, and none
of them is dictatorial. Two examples are used to show why transitivity is crucial for
the ultrafilter lemma:
Example 3.7. For arbitrary x, y EX and p E P(X)N. Define f by setting x ~y unless
y >-lx and x >-iy for all i 1, in which case x>-y. Then no coalition, including N,
is either decisive or inversely decisive and so (1) and (4) fail. For many profiles p,
the relationf(p) will not be transitive: if x >- z >-l y and z >-ix >-iy for all i X 1, then
x y zx.
Example 3.8. Pareto extension: For arbitrary x, y EX and p E P(X)N, set x -y unless
x >-iy for all i, in which case x >-y. In this case N is the only decisive set, so (4) fails.
Note thatf(p) is not transitive, because if y >-I z >- x and z -i x >-iy for all i 1 we
have x -y z >-x. The idea that unanimity should be reflected in collective decision
making, whenever it occurs, is about a hundred years old, but Sen (1969, 1970a) made
the Pareto extension rule a part of modern social choice theory, by giving it formal
expression and connecting it to Arrow's hypothesis. ·
The next example shows that IIA is crucial for the ultrafilter lemma.
Example 3.9. For convenience, assume that X is a finite set with at least three
members, and choose some v EX. For arbitrary p EL(X)N set f(p)=p(l) if v is at
the top of p(l), and otherwise setf (p)=p(2). Coalition {1,2} is decisive, but neither
{ 1} nor N \ {1} is decisive, so (4) fails. IIA is not satisfied: suppose that v is at the
top of p(l) and at the bottom ofp(2). Then v Sf(p)z for all z X \ {v}. But if profile r
has r(i) =p(i) for all i E N \ { 1}, and w at the top of r(l) with v in second place, then
we have z f(r) for all z EX \ v,w} although r I{v,z} =p {v,z}. U
If we drop nonimposition from the list of requirements of the ultrafilter lemma then
we cannot derive properties (1) or (4), as the next example shows.
Example 3.10. The domain off is P(X)N. Choose some ordering Q C P(X) and set
f(p) = Q for all p E P(X)N. There are no decisive coalitions, althoughf is transitive-
valued and satisfies IIA. ·
The next example shows that we cannot establish (3) of the ultrafilter lemma if we
drop the chain property from the hypothesis.
Example 3.11. There are at least three individuals, and the domain forf is the set
of all p E L(X)N such that for some i E N we have p(h) =p(j) for all h, j E N \ {i}.
Set f(p) =p(j) for any j such that p(j) =p(h) for at least one h j. There are no free
triples, so there are no chains of free triples. No singleton coalition {i} is decisive. But
any two-person coalition is decisive, because if x >-iy for two persons i, then either
these two belong to the set of n - 1 individuals with identical preferences, or else every
i N has x >-iy. In either case we get x >-y. Therefore, {1,2} and {2,3} are decisive,
but their intersection is not. U
The assumption that X has at least three members is crucial. Majority rule,
introduced as Example 3.1, satisfies IIA on any domain, and it is non-null and satisfies
nonimposition - unless the domain is severely restricted. If IXI =2 then f is also
transitive-valued. But majority rule does not have the intersection property (3) if there
is a free pair: suppose N = {1,2,3}. Then {1,2} and {2,3} are both decisive coalitions -
they are majority coalitions - although {2} is not decisive.
The assumption thatf is non-null is essential to the ultrafilter lemma because the null
rule satisfies all the other conditions of the lemma, but it has no decisive or inversely
decisive coalitions.
Now that we have the ultrafilter lemma, the proof of Arrow's impossibility theorem
will be brief. Arrow's original proof employs the same ingredients as the contagion and
ultrafilter lemmas, but it organizes them somewhat differently. We emphasize that no
one had conjectured anything like Arrow's theorem when his justly famous monograph
appeared in 1951. For some personal background about Arrow that is related to his
discovery see: Feiwel (1987), Kelly (1987), and Arrow's own comments in Arrow
(1983, pp. 14).
A variety of proofs of the impossibility theorem are available, including: Fishburn
(1970), Blau (1972), Wilson (1975), Barbera and Sonnenschein (1978), Sen (1979,
1986), McLennan (1980), BarberA (1983), Rubinstein and Fishburn (1986), Suzumura
(1988), Blackorby, Donaldson and Weymark (1990), Saari (1994), Krause (1995),
Geanakoplos (1996), Denicol6 (1996) and the correction in Denicol6 (2001), Pouzet
(1998), Reny (2001), and Dardanoni (2001). These proofs, and the one that we're about
to present, imply that a transitive-valued social welfare function on a full domain must
be dictatorial if it satisfies the Pareto criterion and IIA. Because non-dictatorship is one
of Arrow's requirements, his conditions are inconsistent.
Arrow's impossibility theorem. If X has at least three members and P C P(X)N
has the chain property, then there is no transitive-valued social welfare function f
satisfying IIA, the Pareto criterion, and non-dictatorship.
Proof: Suppose f is transitive-valued and satisfies IIA and Pareto. Note that the
Pareto criterion is equivalent to the statement, "N is decisive", which implies that the
collection U of decisive coalitions is non-empty. U is finite because N is finite, and
so we can select a coalition H e U of smallest cardinality. We have IHI > 0 because

0 U. Let j be any member of H. If {j} U then N \ j} e U by part (4) of the
ultrafilter lemma. But then H nN \ {j} e U by part (3). But H nN \ {j} has one less
member than H, contradicting our selection criterion for H. Therefore, we must have
{j} E U, and thus f is dictatorial. ]
The argument just presented is basically a demonstration that for any finite set N, and
any ultrafilter U on N, there is some i E N such that U = {J C N: i E J}: if N is finite
then so is U, and thus n U, the intersection of all the members of U, will belong to U
by repeated application of (3). [We say that U is fixed if nU is not empty. Therefore,
every ultrafilter on a finite set is fixed by (1)]. Because nU belongs to U, if i C nU
then N \ {i} C U and thus {i} C U by (4). Finally, {i} C U, i E nU, and (2) imply that
U={JCN: iEJ}.
Some of the alternative proofs that we have cited are short, although they assume a
full domain. (It is easy to extend such arguments to an arbitrary domain with the chain
property by first of all selecting any two pairs of distinct alternatives {x,y} and {w,z}
from X, and then alternatives ul, 2, . ..,k such that {x,y,v }, {, l, v2},... , {k,W,z}
are all free triples. The rulef IY has a full domain for each of these triples Y, and thus
is dictatorial. The same individual must be the dictator on each Y, because each has
two alternatives in common with its successor.) The longer proof used here uncovers
the ultrafilter structure that is needed for the trade-off results of the next section.
Wilson (1975), Rubinstein and Fishburn (1986), and Krause (1995) each obtain
Arrow's theorem as a special case of an original general aggregation theorem. Both
Barbera and Sonnenschein (1978) and McLennan (1980) derive Arrow's theorem as
a corollary of an original theorem on probabilistic social choice. The Krause proof
also generalizes the results of Gevers (1979) and d'Aspremont (1985), which apply to
preference domains that have enough structure to permit interpersonal comparisons
to be made. [See d'Aspremont and Gevers (2002, Chapter 10 in this Volume) on
interpersonal comparability].
Even if individual j is a dictator for f, it may not be the case that f(r)= r(j) for
each profile r if individual indifference is allowed, as we now illustrate:
Example 3.12. Serial dictatorship: With N = {1,2,... , n}, define the social welfare
functionf on P(X)N: for arbitrary x, y EX set x -y if and only if there is some i N
such that x >-i y, and x ah y for all h <i. Individual 1 is a dictator although we do not
havef(p) =p(1) for allp P(X)N. 0
If the domain is full, we can state an interesting special version of Arrow's theorem
by replacing Pareto with a condition that is much weaker in general: social welfare
function f satisfies weak unanimity if whenever r(i) = r(l) for all i E N and there is
an alternative x that is alone at the top of each r(i), then x must rank alone at the
top of f(r). Note that weak unanimity and IIA imply the Pareto criterion on a full
domain, even if X is infinite. (If X is infinite, we can use Zorn's lemma to guarantee
that there exists some linear ordering Q of X. Then for arbitrary x CX, we can create
52 D.E. Campbell and J.S Kelly
a new linear ordering from Q by removing x and placing it at the top). In general -
i.e., without the full domain assumption - weak unanimity is much less restrictive than
Pareto.
Corollary to Arrow's theorem. Suppose that X has at least three members and that
f is transitive-valuedand satisfies IIA and weak unanimity.
(1) If the domain off is P(X)N then f is directly dictatorial.
(2) If the domain off is L(X)N then there is some i N such thatf (p) =p(i)for all
p G L(X) N. That is, there is a dictator and the social ordering is always identical
to the dictatorS preference.
Note that on L(X) N dictatorship implies IIA, but it is not true that dictatorship implies
IIA on P(X)N, as the next example shows.
Example 3.13. P=P(X)N: For every pEP, set f(p)=p(1) unless x-ly for all x,
y eX in which casef(p) =p(2). Person 1 is a dictator forf, but when individual 1 is
indifferent between all the alternatives then person 2's preferences prevail. This rule
satisfies the Pareto criterion because the social ranking is always identical to someone's
preference ordering, andf (p) is always complete and transitive for the same reason.
But IIA is violated if X has at least three members: suppose x ly and x >Az for all
z EX \{x,y}. Let p(2) be any member of L(X) such that z - x for all z CX \ {x}.
Then x -f(p) Z, but if x~'z for all z EX, and r(i)=p(i) for all i 1, then y f-(,.) x,
although r x,y} =p {x,y}.
The assumption that X has three or more members is critical for Arrow's Theorem.
If IX = 2 then both IIA and transitivity are satisfied vacuously. Any non-dictatorialf
consistent with Pareto - majority rule, for instance - will satisfy all of Arrow's
conditions, except for the requirement that X has more than two members.
If IX > 2, but we are willing to relax, or even set aside, one of Arrow's conditions,
what are the prospects for designing an appealing social welfare function that satisfies
the other conditions? Of course, if we drop non-dictatorship from the list of conditions,
the other Arrow conditions are consistent: just choose some i E N and set f(p) =p(i)
for every profile p. This will certainly satisfy IIA, and f(p) will be transitive for all
p P(X)N. This f satisfies the Pareto criterion, because if everyone strictly prefers
x to y then certainly individual i strictly prefers x to y, in which case f sets x -y.
However, there is no social choice context in which dictatorship would be appropriate.
The consequences of relaxing Pareto, transitivity, the domain condition, and
independence of irrelevant alternatives will be taken up in Sections 4, 5, 6 and 7,
respectively.
4. Relaxing the Pareto criterion

If we simply drop Pareto from the list of conditions, the other Arrow conditions are
easily seen to be consistent - by Example 3.10, for instance, which hasf(p) =f(q) for
any two profiles p and q.
Example 4.1. Choose some i E N and set x By if and only y i x. That is, f creates
the social ranking by turning person i's preference ordering upside down. ·
Both Examples 3.10 and 4.1 satisfy all of Arrow's conditions, other than Pareto, but
there is no application in which one of them would be appropriate. We might try to
weaken Pareto somewhat; far enough to give us compatibility with the other conditions,
but still with enough force to disqualify an unresponsive rule like Example 3.10, and
with the responsiveness in the right direction, unlike Example 4.1. Nonimposition, for
instance, is much weaker than the Pareto criterion, but Wilson (1972) proved that it is
strong enough to force rules to be quite undesirable. Iff satisfies nonimposition and
is non-null, then there is either a direct dictator or an inverse dictator, provided that
Arrow's conditions, other than Pareto, are also satisfied.
Wilson's Theorem. Suppose X has at least three members, and P C P(X)N has the
chainproperty. Iff is transitive-valued and satisfies IIA and nonimposition, then f is
null, or directly dictatorial, or inversely dictatorial.
Proof: If N is directly decisive then f is dictatorial by Arrow's Theorem. If N is
inversely decisive, then the ultrafilter lemma implies that the set U of inversely decisive
coalitions has properties (1)-(4). The proof of Arrow's theorem can be adapted to show
that U contains a singleton coalition {j}. Person j must be an inverse dictator. If N
is neither directly nor inversely decisive, thenf is null by the ultrafilter lemma. E
As in the results of the previous section, because there are two tests for a free triple
domain, depending on whether or not individual indifference is assumed away, there
are two results embodied in this theorem. One applies to social welfare functions with
domain P C L(X)N; the other allows individual indifference. Theorem 6.2 in Murakami
(1968, p. 103) is in the same vein as Wilson's Theorem, but not as strong. See Malawski
and Zhou (1994) for an interesting perspective on Wilson's Theorem.
We now employ a trade-off approach to learn more about the nature of admissible
social welfare functions when the Pareto criterion is relaxed. For a general introduction
to social choice trade-off theory, see Campbell and Kelly (1994a, 1997); for a view
of this as part of a general axiomatics program, see Thomson (2001). Here we show
how the scope of an individual's power and the degree of satisfaction of the Pareto
condition can each be measured, allowing us to determine if one can go a long way
towards avoiding dictatorship without departing too much from the spirit of Pareto.
Arrow's theorem implies that every non-dictatorial and transitive-valued social
welfare functionf on L(X)N that satisfies IIA will violate the Pareto criterion. In fact,
if X has a finite number m of members, then there will be at least m - 1 ordered pairs
(x,y) such that y t x for every profile at which everyone strictly prefers x to y. Here's
the proof: iff is a transitive-valued and non-dictatorial rule on L(X)N satisfying IIA,
then there is a profile p and at least one pair {x,y} such that x >-py for all i E N, but
y tf(p)x. Let r be another profile for which x is alone at the top of each r(i) and
y is alone at the bottom of each r(i). Then y f(,) x (by IIA). Let z be an arbitrary
member of X \ {x,y}. If z tf(r) x then we have another violation of Pareto. If x >f(,-) z
54 D.E. Camnpbell and AS. Kelly
then y > (r)z, by transitivity off(r), and that is violation of the Pareto criterion. We
already know that the pair (x,y) violates Pareto, and for every z e X \ {x,y} either (x,z)
or (z,y) will violate Pareto. Counting (x,y), there are at least m- 1 violations. For some
rules there will be exactly m - 1 violations. The argument of this paragraph proves that
if X is infinite then there will be an infinite number of violations of Pareto.
Suppose we look for a non-dictatorialf with a relatively small number of violations
of the Pareto criterion. If thisf satisfies nonimposition then, according to the contagion
lemma, if N were decisive for even one pair, it would be decisive for all pairs. So if
we want to have just a small number of violations of Pareto, there will also have to
be violations of nonimposition. If we allow just a few imposed pairs, can we move
far from dictatorship? We relate this to the question: can we confine the scope of any
individual's decisiveness to a small subset of X? We will say that individual i dictates
on Y C X if individual i is a direct or inverse dictator forf I Y. We illustrate what can
happen with the following example:
Example 4.2. X =X 1 UX 2, withX 1 CX 2 = 0 and X 1 I = IX 2 1= 10. Definef by having
individual 1 dictate on X 1, individual 2 dictating on X 2, and for all x CXI and all
y CX 2, setting x >-y at all profiles in L(X)N. No individual dictates on more than
half of X. But the social ordering of a majority of ordered pairs is fixed in the
sense of being the same at every profile. Of the 20 19 = 380 ordered pairs of distinct
alternatives, only 10 9 + 10. 9 = 180 are not fixed. ·
In general, iff is transitive-valued and satisfies IIA then either some individual is
a dictator (or an inverse dictator) on a set containing at least half the members of X,
or else over half of the pairs of alternatives are fixed. To prove a general trade-off
theorem relating the size of largest sets on which an individual dictates to the number
of fixed pairs, we need a preliminary result that shows that the kind of partitioning of
X into X 1 and X 2 displayed in Example 4.2 is inevitable, unlessf is null or dictatorial
or inversely dictatorial. We begin by defining the binary relation >> on the family of
nonempty subsets of X, for arbitrary social welfare function f: set Y >>f Z if and only
if y >-f(p) z for all y E Y, z E Z, and p E P. Most of the following lemma was proved
in Wilson (1972). Note that it only assumes IIA and transitivity of the social ordering
in addition to the free triple property. Therefore, it is valid regardless of the number
of violations of the Pareto criterion.
Wilson's partition lemma. Let X be any set of alternatives. Suppose that P C p(X) N
has the free triple property, and f satisfies IIA and is transitive-valued. Then > is
transitive, and there is a unique partition C of X such that either Y Z or Z of Y
for any two distinct members Y and Z of C. Moreover for all Y E C containing more
than two members, f Y is null, or directly dictatorial, or inversely dictatorial.
Each member Y of the partition C is called a component off. Iff Y is either directly
or inversely dictatorial for a member Y of C, we refer to Y as a dictatorial component.
Iff I Y is null we refer to Y as a null component. Proof of the above version of the
lemma can be found in Campbell and Kelly (1993). The key is showing that f Y
satisfies nonimposition if Y is a component off. Then Wilson's Theorem is applied

to f I Y if Y has three or more members.
Notice that for the partition lemma we strengthened the chain property to the free
triple property. The chain property is not sufficient here:
Example 4.3. X contains at least four alternatives. Choose an element a of X, and
let R be a fixed linear ordering on X \ {a}, and let O be the ordering on X \ {a} for
which each alternative is indifferent to every other alternative. The domain P consists
of all profiles r such that, for each i N, the restriction of r(i) to X \ {a} is R or
R - 1 or O. The position of a in r(i) is unrestricted. P has the chain property: given
distinct pairs (x,y) and (w,z) of alternatives from X \ {a}, the triples {x,y,a}, y,a,w},
and {a,w,z} are free. Letf be the rule that has alternative a at the top of everyf(r),
andf(r) (X \ {a})= O if that is the ordering of X \ {a} for even a single individual.
Otherwise f(r) I(X \ {a})=R, unless r(i) (X \ {a})=R' for a strict majority of the
individuals i, in which casef(r) (X \ {a}) =R- l . Thenf satisfies IIA and eachf(r) is
transitive. The components off are {a} and X \ {a}, butf I(X \ {a}) is not inversely
or directly dictatorial, nor is f I(X \ {a}) null. ·
We say that the pair (x,y) is fixed by f if f(p) {x,y} =f(r) {x,y} for all profiles
p and r in the domain off. Hence, the social ordering of fixed pairs is completely
unresponsive to individual preferences. The partition lemma reveals that iff is neither
inversely nor directly dictatorial then some pairs will be fixed, and that fixed pairs have
their social ordering determined independently of individual preferences. The lemma
also enables us to establish a lower bound on the number of fixed pairs as a function
of the scope of dictatorial power.
Consider first the case of a finite outcome set X, with m members. If we don't want
individuals having dictatorial power (direct or inverse) over large subsets of X then
there will have to be a lot of components or else one or more large components that are
null. Either of these cases leads to many fixed pairs. Assuming a free-triple domain,
if f is transitive-valued and satisfies IIA we can prove that either some individual
dictates over more than half the outcome set or at least half of the pairs of outcomes
have their social ranking determined without consulting anyone's preferences. In fact,
for any fraction t > 2, either there will be some individual who dictates on a subset
containing more than the fraction t of outcomes, or at least the fraction 1 - t of the pairs
of outcomes have their social ranking fixed independently of individual preference.
This tells us that even if we do not insist on satisfying all of Arrow s criteria in
a strictly logical sense, we may not be able to come close to satisfying them all
in spirit: every transitive-valued social welfare function satisfying IIA will either
violate the Pareto criterion at many points, or there will be an individual with a lot of
power.
The trade-off theorem. Let m denote IXI. Assume that < t < 1, and 7 C p(X) N
has the free triple property. If f satisfies HA and is transitive-valued then either f
has a dictatorialcomponent with more than tm alternatives, or else the fraction oJ

ordered pairs of distinct alternatives that arefixed by f is at least (1- t).
We will see why t < 2 has to be excluded from the hypothesis.
Example 4.4. X= {Xl,X 2 , ... ,xm}, where m =2k, an even number. Each {xi,xi }
is a component off for i= 1,3,5,..., m-1. The alternatives in each component are
ordered by majority rule, and for every profile we set xi - xj if xi and x belong to
different components and i <j. Note that each f(p) is transitive for every profile p in
P(X)N, because each component contains only two alternatives. If we set t = ± then
we can say that no dictatorial component has more than mt members, because there
are no dictatorial components. There is a total of m(m - 1) pairs in X. If t = ± then
(1 - t) m(m - 1) = (m - 1)2. Are there this many fixed pairs? The only pairs that are not
fixed are those contained in a component. Then there are m pairs that are not fixed, and
hence m(m - 1)- m = m(m -2) fixed pairs. This number is smaller than (m - 1)2. [
We will look at an example that does have some dictatorial components.
Example 4.5. n>4, m=12, and X={xI,x 2 ,...,x 2 }. We define f on L(X) by
first identifying its components: They are {x,x 2,x 3}, {x4,x 5 ,x6}, {x 7,x 8,x 9 }, and
{xio,xl, xl 2 }. Let person i dictate within the ith component, with xh, >-xj ifxh and xj
belong to different components and h <j. There are 132 pairs in X. Each of the four
components has 6 ordered pairs of distinct alternatives, so there are 24 pairs that are not
fixed. Then there are 108 fixed pairs. If t= I then no dictatorial component has more
than mt = 3 alternatives. It can be verified thatf(p) is transitive for every p in P(X)N.
Clearly,f satisfies IIA. The theorem says that there will be at least ()(132)= 99 fixed
pairs, and the actual number is even greater. U
In Example 4.5 slightly over 80% of the ordered pairs are fixed. This means that over
80% of the pairs are socially ordered without consulting anyone's preferences. The
6 ordered pairs in the component {xI,x2,x 3 } are socially ordered without consulting
the preferences of any member of the coalition N \ {1}. Because the 108 pairs drawn
from different components are ranked independently of any individual's ordering, we
have 132- or 86%, of the ordered pairs from X socially ordered independently of
the preferences of anyone in N \ {1. In addition, the six pairs from {x 4 ,X5 ,X6 } are
socially ordered without consulting the preferences of anyone in the coalition N \ {2}.
Therefore, 12, or about 91%, of the ordered pairs are socially ranked independently
of the preferences of anyone in N \ {1,2}, and 126,
132' or 95%,
5%, of
of the
the pairs
pairs from
from X
X are
are
socially ordered independently of the preferences of anyone in N \ {1,2,3}. In fact, for
any transitive-valued social welfare function satisfying IIA, if the integer : is small
then there is some subset S C N consisting of all but persons such that at least the
fraction 1 - of outcome pairs have their social ranking determined independently
of the members of S. We say that the pair (x,y) is independent of S C N if for all
profiles p and r in the domain we have f(p) {x,y} =f(r) I{x,y} whenever p(i) =r(i)
for all iEN\S.
The independence theorem. XI = m. Let B3 be any positive integer such that

[3 < (m - /m)2/(m - 1) and [3 <n. If P C L(X)N has the free triple property, and f
is transitive-valued and satisfies IIA, then there exists a subset S of N such that
IS >n n-3 and the fraction of pairs (x,y) that are independent of S is at least
1 - (m + 3)2/413m 2 .
For example, if there are 100 individuals (n = 100, the order of magnitude of a
legislature) then 90% of the members of N are not consulted in determining the social
ranking of over 97% of the pairs of alternatives, whatever transitive-valued social
welfare function we employ, if it also satisfies IIA. (Set 3 = 10). 3 has to be small
relative to the total number of alternatives for this to hold. In that case, 1- 1 is a
good approximation to the lower bound of the theorem if there is a reasonably large
number of outcomes. The trade-off and independence theorems were first stated and
proved in Campbell and Kelly (1993).
When X is a measurable subset of Euclidean space we face virtually the same
dilemma as in the trade-off theorem, and the same disenfranchisement problem as in
the independence theorem, but with 1 - I itself as the bound for the second theorem
[Campbell and Kelly (1995c)]. For countable X, an asymptotic density version of the
trade-off theorem is presented in Campbell and Kelly (1995d). When X is the space
of allocations of public goods, and the domain is restricted to individual preferences
with classical economic properties, there is a counterexample to the conclusion of the
partition lemma [see Campbell and Kelly (1995c)]. However, it is not known if there
is a counterpart to the trade-off theorem in that case.
A binary relation t on X is continuous if for all x EX, the sets {z EX: z >-x} and
{z EX: x >-z} are open. If X is a connected T 1 space, then we face an extreme trade-
off within the family of rules satisfying IIA and continuity of the social ordering:
The extreme trade-off theorem. Assume that X is a connected T 1 space and P has
the free triple property. Iff satisfies IIA, andf (p) is a continuous orderingfor each
p E P, then f is constant or dictatorialor inversely dictatorial [see Campbell (1992a,
Theorem 2)]. Campbell (1992c, Chapter 8) also contains a proof
5. Relaxing transitivity
Sen (1969) began the formal study of the consequences of relaxing the transitivity
requirement. If we simply drop transitive-valuedness from the list of conditions, the
other Arrow conditions are easily seen to be consistent:
Example 5.1. Paradox of voting [Condorcet (1 785)]: Simple majority rule is defined
on P(X)N by setting xtf(r)y if and only if {iEN: x y} has at least as many
members as {i E N: y tr x}. It is easy to confirm that majority rule satisfies the Pareto
criterion, IIA, and non-dictatorship. But transitivity does not hold in general: suppose
there are three individuals and X = {x,y,z}. Consider the profile
1 2 3
z x y
x y z
y z x
Then x-y>-z>-x. Nurmi (1999) presents a large variety of voting paradoxes,

accompanied by insightful discussions. U
McGarvey (1953) was the first to prove that, given any complete binary relation >
on X, no matter how many intricate cycles are embedded in it, for n sufficiently large
there exists a profile such that the social ranking generated by simple majority rule is A.
McGarvey's bound on the number of individuals needed to replicate an arbitrary binary
relation was substantially reduced by Stearns (1959). See also Erd6s and Moser (1964).
Now, suppose that there are k bills under consideration, and that each will either be
adopted or rejected. In that case, the members of X are k-vectors of zeros and ones.
An individual's preference ordering on X is separableif her preference concerning any
given bill is independent of the fate of any other bill. Hollard and Le Breton (1996)
establish that for every separable binary relation t on X there is a profile of separable
individual preferences for which the majority rule relation is >. This result is extended
by Vidu (1999).
Profiles that yield majority rule cycles are not rare. As early as Black (1948,
1958), it was shown that for the small numbers case, the proportion of profiles at
which intransitivities are generated by the simple majority rule increases with the
number of alternatives and with the number of individuals (taking some parity issues
into account). A general theorem is provided by Kelly (1974), which also presents a
conjecture regarding a similar monotonicity for the proportion of profiles at which a
majority winner fails to exist [see Kelly (1994c)]. There are many sampling results
supporting this conjecture [see Gehrlein (1997)] and some theoretical support [see
Fishburn, Gehrlein and Maskin (1979a,b)].
A super majority rule is determined by a fraction a > , with x -y if and only if
at least an individuals strictly prefer x to y. (Assume linear individual preferences.)
Balasko and Crbs (1997) show that for a > 0.53 super majority cycles become rare
events as the number of alternatives increases. However, Tovey (1997) demonstrates
that the paucity of cycles for a > 0.53 is a consequence of the preponderance of
ties. Mala (1999) demonstrates that McGarvey's theorem does not hold for any super
majority rule.
Alternative x is a majority winner at profile p if x ty for all y, where is the
majority rule relation atp. McKelvey (1979) has shown that in a spatial voting context,
if there is no majority winner, i.e., an alternative that beats or ties all others, then
there is a voting cycle over all of X. The seminal paper is Plott (1967). See also
Schofield (1985), Enelow (1997), and Banks (1996). The spatial model uses two-
dimensional (or higher) Euclidean space and a special family of preferences, each of
which is characterized by a bliss point and a distance function. We say that bi in X is
individual i's bliss point at profile p if bi is the unique most-preferred alternative for
p(i). We move down the preference ordering as alternatives get more and more distant
from the bliss point.
The rest of this section explores the implications of weakening the transitivity
requirement. We say that a binary relation is quasitransitive if for all x, y,
and z in X, x >-y - z implies x - z. Note that transitivity implies quasitransitivity.
Quasitransitivity preserves transitivity of strict preference but, unlike full transitivity,
does not impose the problematic transitive indifference property. In general, if X is
finite and is quasitransitive then there exists an x E X such that x t y for all y E X.
If f(r) is quasitransitive for every profile r in the domain off we say that the social
welfare functionf is quasitransitive-valued.
Example 5.2. Recall the Pareto extension rule, for which x-y holds unless x >-iy
for all i C N, in which case x >-y. This rule satisfies all of Arrow's conditions except
transitivity, but f is quasitransitive-valued: if r is an arbitrary profile in P(X)N, and
x >-y >-z then everyone strictly prefers x to y and everyone strictly prefers y to z.
Therefore, everyone strictly prefers x to z, by transitivity of individual preference. Then
x >-z, and hence f(r) is quasitransitive. ·
The Pareto extension ranking establishes that the Arrow conditions are consistent
provided that we substitute quasitransitivity off(p) for transitivity. But for domains
within which each individual preference is a linear ordering, any social welfare
function satisfying this new set of conditions either gives each individual the power
to prevent an alternative y from socially ranking above any x, simply by declaring
a strict preference for x over y, or else there are one or more individuals who have
no influence onf at any profile. To prove this we need some new definitions. Social
welfare functionf on domain P gives coalition J C N veto power, if for all p C P, and
all x,y EX, x iy for all i EJ implies x y. In words, y cannot rank above x in the
social preference relation if every member of a coalition with veto power expresses a
strict preference for x over y. We say that individual i has veto power if coalition {i}
has veto power, and we sometimes say that individual i is a vetoer in that case. What
if persons 1 and 2 both have veto power? If x >-ly and y >-2x then we must have
x -y. Unless both individuals declare at least a weak preference for x over y, we can't
have x >-y. In fact, Arrow's conditions, with quasitransitivity in place of transitivity,
imply that there is a set of individuals each with veto power, and that set is a decisive
coalition: the coalition J C N is called an oligarchy for social welfare functionf if J
is decisive forf and every member of J has veto power. In that case, we say thatf is
oligarchical.
Gibbard (1969), Guha (1972), and Mas-Colell and Sonnenschein (1972) indepen-
dently proved the following analog of Arrow's Theorem.
Oligarchy theorem. Suppose that X has at least three members and the domain
p C p(X) N has the chain property. Iff is quasitransitive-valuedand satisfies IIA and
the Pareto criterion, then f is oligarchical.
Proof: We can use part (3) of the ultrafilter lemma because the proof of (3) uses only
transitivity of the strict part off(p), not transitivity off(p) itself. It does appeal to
the contagion lemma to establish that every coalition J C N that is decisive for some
pair (x,y) of distinct alternatives is decisive for every pair of alternatives. However,
whenf is quasitransitive-valued, this follows in part from the fact that Pareto implies
nonimposition. In addition, the Pareto criterion allows us to replace y f(q)z and
z f (q)x in steps (a) and (b) in the proof of the contagion lemma with y f/ (q)z and
Z >f (q) x, and that in turn allows us to use transitivity of >f (r) instead of transitivity of
tf(r) in the proof.
Now, N is decisive by Pareto, so the collection U of decisive coalitions is not empty.
It is finite, because N is finite. Because eachf(p) is quasitransitive, the intersection
of two decisive coalitions is decisive by our adaptation of part (3) of the proof of
the ultrafilter lemma. Because U is finite, the intersection property implies that the
intersection of all members of U is decisive. Let J denote that coalition. We show
thatf is oligarchical by proving that every member of J has veto power.
Suppose that j belongs to J, but individual j does not have veto power. Then there
is a profile p and two alternatives x and y such that x >-Py but y Zf(p) X. Let {x,y,z}
be a free triple. Choose any profile r such that r I{x,y} =p {x,y} and x >- z >-y, with
x - z and y >- z for all i X j. Then y >f(,) x by IIA, and x >f(r)z by Pareto. Therefore,
y >Sf () z, by quasitransitivity off(r). Note that everyone but individual j strictly prefers
y to z at r. The argument of the second paragraph of the proof of part (3) of the
ultrafilter lemma shows that this implies that N \ {j} is a decisive coalition.
We have a contradiction: individual j belongs to the intersection of all decisive
coalitions, and N \ {j} is decisive. We have to drop the supposition that J contains an
individual without veto power. Therefore, f is oligarchical. l
This theorem presents us with an unfortunate dilemma: because x -y must hold if
x -iy and y >-ix for two members i and j of the oligarchy, we will typically have
lots of social indifference if the oligarchy is large. If we don't want a lot of social
indifference between very different alternatives, we can employ a rule with an oligarchy
that has very few members. But if the oligarchy is small and individuals are not
indifferent between distinct alternatives, then the preferences of many citizens will
not be consulted in determining the social ranking at those profiles: if everyone
in the oligarchy strictly prefers x to y, then the social preference relation has x
strictly preferred to y by decisiveness. If every member of the oligarchy strictly
prefers y to x, then y is strictly preferred to x socially. The only other possibility
has someone in the oligarchy strictly preferring x to y and another strictly preferring
y to x, in which case x and y are socially indifferent by veto power. In other words,
if there is no individual indifference then the social ranking of an arbitrary pair of
alternatives is determined without consulting the preferences of non-members of the
oligarchy. Moreover, a consequence of Theorem 1 in Fountain and Suzumura (1982)
is that the trade-off dilemma is inevitable even if we replace the Pareto criterion
with strict nonimposition, which requires (for arbitrary but distinct x and y) that
there be some profile p at which x ranks strictly above y inf(p). Schwartz (2001)
replaces Arrow's transitivity requirement with a restriction on the length of a
e
sequence x' -f(p) 2 f(p) 3 ~f(p) *~'' x, and proves that this limit, along with
,(p)
the other Arrow conditions, implies that there will be profiles p at which every pair
of alternatives belongs to some cycle x1 >-f(p) x2 f(p) ... f(p) XT f(p) x 1.
If there is an oligarchy, then of course every member of the oligarchy will have
veto power, and thus N \ {i} is not decisive for any pair, for any individual i in the
oligarchy. What if we are willing to relax the Pareto criterion? No matter how we do
this, there will still be some individual i with substantial power, in the sense that the
coalition N \ {i} is not decisive over more than half of the pairs of alternatives in X.
Barrett, Pattanaik and Salles (1990, 1992) establish counterparts to this claim for
fuzzy aggregation rules and for fuzzy individual preferences, respectively. We shouldn't
actually measure the power of a coalition by counting the number of pairs for which
that coalition is decisive because that can be misleading. If x - y for all profiles, then
every coalition is decisive for (x,y). We say that coalition J is significantly decisive
for (x,y) if it is decisive for that pair, and y t x holds at some profile.
The quasitransitivity trade-off theorem. Suppose that X has at least three members
and P C L(X)N has the free triple property. Iff is quasitransitive-valuedand satisfies
[IA, then there is some individual i such that N \ {i} fails to be significantly decisive
for at least half of the pairsfrom X [Campbell and Kelly (1998)].
The bound of one half is tight, as we now demonstrate.
Example 5.3. X = {xl,X 2,... ,Xm} where m < n. Define f:
(1) If h < i, then Xh xi for every profile p.
(2) Set Xh >- Xi if and only if h <i and there is some J C N such that Xh >-j xi for all
j J, and IJI > n-(i-h).
IIA is certainly satisfied, andf(p) is quasitransitive for all p, as we now demonstrate.
Suppose xh -xi and xi >-Xk; then h < i < k. At least n - (i - h) persons j have xh j Xi,
and at least n- (k-i) persons j have xi >-j Xk. Then the number of individuals j
for whom h -j xi >-j xk is at least n - [(i - h) + (k- i)] = n - (k - h). Therefore, by
quasitransitivity of individual preference, there are at least n - (k - h) persons j with
xh >j Xk, and thus h >- Xk by definition off. Vacuously, every individual has veto
power for every pair (xh,xi) such that h < i. No individual has veto power for any
pair (xh, xi) such that h > i. Therefore, each individual has veto power over exactly half
of the pairs of alternatives. Finally, for arbitrary i E N, coalition N \ i} is significantly
decisive for exactly half of the pairs, as we now show. Suppose i >h. Then xh -xi
if xi -i h for all i e N. But for arbitrary i, if every j in N\ {i} has h >-jxi, then
IN \ {i}l = n - > n - (i - h), and hence x >-xi. ·
The binary relation t is acyclic if for every positive integer T > 1 and every choice
of T alternatives, x l , x 2,... ,x r in X, if x 1 >x 2 >. ..- >xT then xT •x I. Acyclicity is
a necessary and sufficient condition for the existence of maximal elements from finite
subsets of X. See von Neumann and Morgenstern (1944, p. 597) and Sen (1970a,
p. 16). Note that quasitransitivity implies acyclicity. A social choice rulef is acyclic-
valued if f(p) is acyclic for all p in the domain off. What happens if we retain
Arrow's other conditions but further weaken the condition of transitive-valuedness, and
require only acyclic-valuedness of the social ranking? (We mean the version of Arrow's
theorem that assumes a full domain, not one based on the free triple assumption. The
test for acyclicity applies to all T > 3, not just to T = 3 - i.e., not just to triples). We
first observe that with each f(p) merely required to be acyclic, it is possible that the
intersection of the decisive coalitions will be empty, even if Arrow's other axioms are
satisfied:
Example 5.4. Assume that IX I < n, which means that there are more individuals than
alternatives, and a full domain. Let x be preferred to y if and only if either n or
n - 1 individuals strictly prefer x to y. This rule satisfies Pareto and IIA and is acyclic-
valued. All coalitions with exactly n- 1 members are decisive, and the intersection of
those coalitions is empty. And, of course, no individual is a vetoer. I
This example illustrates that results will depend on the number of alternatives relative
to the number of individuals: we will see that if X I > n, the intersection of all decisive
sets will be non-empty and constitute a minimal decisive set. However, f need not be
oligarchical because not all individuals in the minimal decisive coalition have to be
vetoers.
Example 5.5. x>y if and only if x>-ly and x>-iy for at least one il 1. The
intersection of the decisive sets is { 1}, and 1 has veto power, but { 1} is not an oligarchy
because it is not decisive; person 1 needs the support of one other person. No proper
superset of {1} is an oligarchy because person 1 is the only individual with veto
power. X
The set {1} in Example 5.5 is a collegium, which is a non-empty intersection of all
the decisive coalitions.
The Brown-Banks acyclicity theorem. Suppose that X has at least three members,
and there are at least as many alternatives as individuals. Iff is an acyclic-valued
social welfare function on a fJidl domain and it satisfies the Pareto criterion then it
has a collegium.
Brown (1975) first conjectured and proved this result, but with IIA added to the
hypothesis. Banks (1995) pointed out that Brown's proof does not depend on IIA,
because decisiveness itself embodies a lot of independence. Note that the Borda rule
meets all of the conditions of the Brown-Banks Theorem, except perhaps the one
relating m = IXI to n= IN[. Suppose that all but one individual ranks y in last place
and x in second last place at p. If the remaining person ranks y first and x last, then the
Borda score for x will be n - 1 and the Borda score for y will be m - 1. (See Example
7.1 below, p. 70.) In that case, the Borda rule yields y t x if and only if m > n. Because
all but one individual ranks x above y, we conclude that N is the only decisive coalition
when m > n. This agrees with the implication of the theorem.
Even where n =m and a collegium exists, it may be that no individual has veto
power:
Example 5.6. X={x,y,z}, n=3, and P=L(X)N. The social rankings on {x,y} and
{y,z} are determined by simple majority voting, while the social ranking has x strictly
above z (resp., z strictly above x) if and only if every individual strictly prefers x to z
(resp., z to x). This rule satisfies Pareto and IIA and yields an acyclic ranking at all
profiles. The only decisive set is N (which then is the collegium); no one is a vetoer
on all pairs of alternatives. As we shall soon see, this is due to the fact that the social
choice rule is not neutral in its treatment of alternatives. ·
In the case of Example 5.6, while no individual is a vetoer on all pairs of alternatives,
every individual is a vetoer on two pairs, (x,z) and (z,x), while all coalitions of two
individuals have veto power (in fact are decisive) over all pairs of alternatives. Much
research on acyclic social choice either identifies large collections of pairs on which
at least one individual is a vetoer, or finds small coalitions (but with more than one
individual) that have veto power over all pairs.
Most analyses of the existence of coalition veto power have assumed some degree of
neutrality as suggested by Example 5.6. A rule satisfies NIM (neutrality, independence,
and monotonicity) if and only if for all x,y,z,w in X, whenever profiles p and q satisfy
the condition that for all i,
(x >-P y implies z t>q w) and (w >-q z implies y >-P x),
then x -f(p)y implies w f(q)Z. Blau and Deb (1977) proved the following:
The acyclicity theorem for NIM rules. Assume that X has at least three members.
Let t be an integer no greaterthan IXI and let {N 1, N2, ... , Nt} be any partition of N
into disjoint non-empty coalitions. Iff is acyclic-valued on P = L(X)N andf satisfies
NIM, then at least one of the Ni has veto power over all pairs of alternatives.
In particular, if X is finite and IXI =m then some coalition as small as [II,] individuals
must have such veto power, where I[ Imis the largest integer not exceeding . It should
be noticed that the acyclicity theorem for NIM rules establishes that many (small)
coalitions have veto power since N can be partitioned in many different ways [Kelsey
(1985)]. In Example 5.5, any of the n - 1 coalitions C with 1 C and IC = 2 will have
veto power (in fact will be decisive).
Kelsey's results are extended and sharpened in Le Breton and Truchon (1995). They
give the size of the smallest coalitions that must have veto power. Moreover, they show
that if that minimum is achieved by some rule, then that rule must give any larger
coalition veto power over all pairs of alternatives.
For how many pairs might a single individual be a vetoer? In an important early
paper, Blair and Pollak (1982) showed that there is an individual who has veto power
over at least (m - n + 1)(m - 1) pairs if m > n > 2 and m > 4, and f is acyclic-valued.
Le Breton and Truchon (1995) give a simple proof of this theorem, based on a lemma
in Ferejohn and Fishbumrn (1979). For the case of rules satisfying NIM, Kelsey (1985)
extends the Blair-Pollak analysis to veto by groups.
We conclude this section with a brief review of three results that assume positive
responsiveness and Pareto decisiveness. Strong positive responsiveness requires that
x f(p y holds if x f(r)y and profile p is the same as r except that some i for
whom x -'y has x -py or some i for whom y >- x has x tpy [May (1952)]. Pareto
decisiveness requires either x -f (p)y or y >-f(p) x at arbitrary profile p if x >-py for all
i. Strong positive responsiveness tends to eliminate indifference in the social ranking.
When there is no indifference at all, transitivity, quasitransitivity, and acyclicity are
equivalent. That observation is not meant to be taken as a starting point for a proof of
any of the next three theorems, but rather an attempt to take some of the mystery out
of the results. The three theorems concern the presence of a quasi-dictator: individual i
is a quasi-dictator if he has veto power and i,j} is decisive for eachj # i.
Strong positive responsiveness is difficult to defend, but the following results
are interesting: Mas-Colell and Sonnenschein (1972) show that f must have a
quasi-dictator if it is acyclic-valued and satisfies IIA, Pareto, and strong positive
responsiveness. Fountain and Suzumura (1982) obtain a partition theorem under the
Mas-Colell and Sonnenschein assumptions, with Pareto decisiveness in place of the
Pareto criterion. They prove that there is a partition of X such that: (l)f I Y is quasi-
dictatorial or inversely quasi-dictatorial for each component Y of the partition; and
(2) if x and y belong to different components thenf {x,y} is imposed. Nagahisa (1991)
generalizes both the Mas-Colell and Sonnenschein and the Fountain and Suzumura
results and also proves a new one: if X is a separable and connected T space,
then for any product set domain with the free triple property, there exists an acyclic-
valued social welfare function satisfying IIA, Pareto decisiveness, and strong positive
responsiveness if and only if X is homeomorphic to an interval in the real line.
(Nagahisa's proof only uses profiles of continuous individual orderings in the domain.
The other two papers assume a full domain.)
6. Relaxing the domain condition
The proof that Arrow's conditions are incompatible does not depend on the domain
of a social welfare function being all of P(X) N, or even all of L(X)N. The free triple
property suffices, and even that was weakened to the chain property by Kalai, Muller
and Satterthwaite (1979). A quite different weakening of the free triple condition that
is still sufficient for an impossibility theorem is given in Kelly (1994a). Fishburn
and Kelly (1997) demonstrate that there is substantial scope for additional domain
reductions. Redekop (1991) shows how robust Arrow's theorem is from a topological
perspective. Domains on which Arrow's conditions are consistent are extremely
small, and Redekop (1993) demonstrates that this remains true for domains in which
individual preference is characterized by a single parameter. This work is discussed

by Le Breton and Weymark (2002a, Chapter 16 in Volume 2 of this Handbook). For a
general discussion of domain conditions, see Gaertner (2001, 2002, Chapter 3 in this
Volume). Here is a simple example of a domain on which the Arrow conditions (other
than the chain property) are consistent:
Example 6.1. P is the set of all p C L(X)N such that there exist i and j E N with
p(i) =p(j) . There are no free triples. The Pareto criterion will be satisfied vacuously
by anyf. Now, choose a fixed Q E L(X) and setf(p) = Q for all p in the domain. IIA
and non-dictatorship are satisfied by f, which is transitive-valued. ·
Surprisingly, there is a domain lying between L(X)N and P(X)N on which the Arrow
conditions (other than the chain property) are consistent, as the next example, due to
Bordes and Le Breton (1990), demonstrates.
Example 6.2. Let O be the null ordering, for which x y for all x and y. Let
P = (L(X) U {O})N . There are no free triples, so there can be no chains of free triples.
Now definef with domain P: Ifp E L(X)N thenf(p) =p(l), but if p(i) =O for some
i N, thenf(p) =p(2). This rule satisfies Pareto and yields transitive social preference.
It is non-dictatorial and satisfies IIA. To establish IIA, suppose p {x,y} = r {x,y). Then
x Py for some i implies both x~ y and p(i)=O= r(i), in which case f(p) I{x,y}
and f(r)l {x,y} are the same as p(2)l {x,y}, and thus f(p) {x,y} =f(r) {x,y}. If
Pl {x,y} =rl {x,y} and x Py does not hold for any i then p and r both belong to
L(X)N, in which case f(p) {x,y} =f(r) {x,y} because f(p) I{x,y} andf(r)I{x,y are
both identical to p(l) I x,y}. See Kelly (1994b) for more details about the possible
variety of Bordes-Le Breton type examples. ·
Most of the work on the role of domain conditions focuses on majority rule.
Transitivity of the majority ranking calls for certain patterns of preferences. Consider
Example 5.1 (the paradox of voting) once again: each alternative is first in someone's
preference ordering, second in someone else's, and last in another person's preference.
Value restriction was introduced in Sen (1966) to eliminate such profiles. Sen gave a
general definition and theorem, but for expositional purposes we will confine attention
to the case of linear preferences. Profile p satisfies value restriction if for every three-
alternative subset {x,y,z} of X there is one member of {x,y,z} that is not below the other
two in any p(i), or is not above the other two in any p(i), or is not in between the other
two in any p(i). Sen showed that when individual preference is linear and the number
of individuals is odd, value restriction implies that majority rule is transitive. Sen also
proved that if individual preferences are linear, then for any n, value restriction implies
that the majority rule ranking is quasitransitive. Value restriction gives us a domain
on which the Arrow conditions (excluding the chain property) are consistent - and
compatible with many other criteria such as neutrality, strong positive responsiveness,
and symmetric treatment of individuals. The family P of all value restricted profiles
does not have any free triples (and hence does not have the chain property), because,
for arbitrary x, y and z, it excludes profiles for which the three orderings of {x,y,z} of
Example 5.1 are embedded, and also profiles in which the three orders of that example
are turned upside down.
Sen's majority decision theorem. If n is odd andp is value restricted then majority
rule is transitive at p.
Proof: Let t be the simple majority relation determined by p. If a >-b - c then at
least (n+1)/2 individuals prefer a to b and at least (n+ 1)/2 prefer b to c. Thus,
there must be at least one individual i such that a -i b -i c. Now, suppose there is
a cycle, x -y >-z - x. Then there must be at least one individual i with x >-iy -i z, at
least one j with y >-j z -jx and at least one individual k with z -k x >-k y. Therefore,
x >-y >-z s-x implies that each member of x,y,z} ranks above the other two in at
least one individual's preference ordering, each member of {x,y,z} ranks below the
other two in at least one individual's preference ordering, and each member of {x,y,z}
ranks between the other two in at least one individual preference ordering. Therefore,
profile p is not value restricted. []
There is a partial converse to this theorem. If n =3 or n >4 and the domain P is
equal to SN for some set S of linear orderings on X, and there is a profile in S N
that is not value restricted, then there is a majority rule cycle for some profile in that
domain. To prove this, assume that n >4, and let k be the smallest integer that is
not less than n. (Example 5.1 takes care of the case n=3, and it is easy to show
that x >-y z >- x cannot hold at any profile in L(X)( 1' 2' 3'4 } , or in L(X) 1'2 }.) If some
profile r in SN does not satisfy value restriction, then there are three alternatives x,
y and z and a profile r such that {r(i) I {x,y,z}: i N} contains the three orderings
of the profile displayed in Example 5.1. Because the domain is a product set, we can
define the profile p by assigning the ordering of column 1 of the profile in Example 5.1
to exactly k of the individuals in N, assign the second column to another k members
of N, and let the remaining n - 2k members of N have the ordering from column 3
of Example 5.1. One can show that n <k < n, and those inequalities imply that a
coalition with 2k members or n-k members is a majority. Then we have a majority
voting cycle x - y >-z S-x at profile p. See Sen (1966, 1970a) for the general treatment.
Cantillon and Rangel (2001) use the geometric tools devised by Saari (1994) to analyze
majority rule and its relatives in a new and insightful way.
A tournament is simply a binary relation - such that x •y implies either x >-y
or y x, but not both. The statement x >-y represents the defeat of alternative y by
alternative x. Even when cycles are present, the mathematics of tournaments can be
used to select an outcome ("winner") in a systematic way. For instance, graph theoretic
techniques can be applied to the tournament for which x >-y means that some majority
prefers x to y. There is a wide variety of solution techniques available - including
Markov methods - and most are analyzed in Laslier (1997), which reports original
work by the author, much of it in collaboration with Gilbert Laffond, Jean Lain6, and
Michel Le Breton.
Levchenkov (1999a,b) proposes a new tournament solution concept that initially
assigns a score to alternative x that reflects the number of alternatives that x defeats in
a majority comparison. Then an alternative's score is adjusted to reflect the scores
of the alternatives that it defeats. When this adjustment process reaches a steady
state, the scores are used to compute the solution. Levchenkov proves that, under his
assumptions, his is the only method with this consistency property.
Without some common thread such as value restriction running through individual
preferences, there does not even exist a super majority rule that guarantees the
existence of a winner in all cases, as we demonstrate with the next example.
Example 6.3. There are n individuals and n alternatives, x l,x 2 ,... ,xn. Consider the
profile
1 2 ... i ... n
XI X2 Xi XI
X2 X3 Xi+ Xl
Xn-1 Xn Xi-2 Xn 2
Xn XI il X,n 1
Note that n- 1 individuals prefer xl to x 2, n- 1 individuals prefer x2 to X3, and in

general n - 1 persons prefer xi to xi + 1 for 1 < i < n - 1, and n - 1 individuals prefer x,
to xl. For any given fraction 2, however small, we can find a value of n such that each
alternative fails to get even the fraction ;i of the votes in a contest with at least one
other alternative. ·
The profile of Example 6.3 exhibits a high degree of diversity of individual preference:
each alternative is first in someone's ordering and last in someone else's ordering. In
fact, each alternative is in the jth position of someone's ordering, for arbitrary j such
that 1 j < n. Sen's majority decision theorem proves that value restriction imposes
enough coherence of individual preferences to guarantee the existence of a majority
winner.
Welfare economics frequently requires a social ranking of alternatives that belong
to some Euclidean space. Thus, we now consider the question of imposing restrictions
on preferences to assure a majority winner when X is a subset of -dimensional
Euclidean space. In that setting Rubinstein (1979) showed that without restrictions,
virtually all profiles fail to yield a majority winner. He assumed that X is a compact and
convex set with a non-empty interior, and that individual preferences are continuous
orderings onX. The seminal paper is Plott (1967). Moreover, when there is no majority
winner, between any two distinct members x andy of X one can find a finite number of
additional alternatives x 1, x 2 ,... ,xk in X such that x >-xl >- x 2 .. >- xk >- y, where
>- denotes the strict simple majority rule relation [McKelvey (1979)].
Consider an arbitrary set X, not necessarily a subset of Euclidean space. Suppose

that at profile p each individual i N has a bliss point bi. In addition, suppose that
we can map the members of X into the real line in such a way that for each i and
each x and y in X on the same side of bi, individual i's preference p(i) has x strictly
preferred to y if and only if x is closer to bi than y. Note that these two suppositions -
called the single-peaked preferences assumption - restrict both the distribution of
bliss points and the nature of individual preferences. When working with a set X that
is not given any structure, the single-peakedness assumption is generalized, and one
merely requires that every triple {x,y,z} from X contains an alternative that is not
below the other two alternatives in the preference ordering of any individual.
Single-peakedness is a special case of Sen's value restriction. To see why, begin by
locating the members of X on the real line and representing individual preferences by
means of a utility function. Under single peakedness, the graph of the utility function
will be A-shaped, possibly with ties at the top or with the right or left arm missing.
Note that if we discard all but three alternatives x, y and z, we will still have the
A shape. Therefore, whichever of the three alternatives is between the other two on
the real line will not be at the bottom for any of the other individual orderings restricted
to {x,y,z}, and hence value restriction holds. Although value restriction yields the more
general existence theorem, it is uery restrictive in Euclidean space of dimension two
or higher [Kramer (1973)].
If the number of individuals is odd, the median voter is the person whose bliss
point bmed sits in the middle of the array of bliss points on the real line. In an important
and influential paper, Black (1948) showed that with single-peaked preferences bed
is a majority winner: if n is odd, then the median voter is person n + 1/2. If x is to
the left (resp., right) of b,,ed then over half of the voters will have their bliss points to
the right (resp., left) of x. If x is to the left (resp., right) of bmed then the median voter
and all those whose bliss point is to the right (resp., left) of bmed will prefer bmed to x.
(If n is even there will be two median voters and perhaps two majority winners.)
When X is a compact and convex subset of E e (-dimensional Euclidean space)
Black's approach does not work for > 1. Assuming that individual preferences are
continuous and convex orderings on X, Greenberg (1979) showed that even super
majority rule will not precipitate an undefeated alternative in X unless the fraction
of the voters required for a majority is at least l/((+ 1).
For arbitrary , a preference ordering on ES is said to be Euclidean if x is preferred
to y if and only if x is closer to the bliss point than y as measured by Euclidean
distance. To get the existence of a majority winner in compact subsets of f-dimensional
Euclidean space one needs a substantial restriction on the distribution of bliss points
and on the form of individual preferences. Grandmont (1978) proved an existence
theorem for the family of domains that properly includes the class of profiles of
Euclidean preferences. Grandmont's condition on the form of individual preference,
while quite restrictive, admits a wide variety of profiles. Caplin and Nalebuff (1991)
obtain a majority winner existence theorem under the Grandmont condition by
assuming only that the probability density of bliss points has a very general concavity
property. This represents a big improvement on the other existence theorems, including
Arrow (1969), Davis, De Groot and Hinich (1972), Grandmont (1978), Caplin and
Nalebuff (1988), and Tullock (1967), the seminal paper in this series. Caplin and
Nalebuff (1991) prove that for any compact subset X of e-dimensional Euclidean space,
a lower bound of 1- [£l(C + l)]t on the proportion of voters needed for a majority
guarantees the existence of an undefeated alternative. As increases, the bound
increases monotonically to 1- lie, which is almost 64%. The undefeated alternative
is the mean voter's bliss point. Ma and Weiss (1995) demonstrate that this outcome
is not always invariant to transformations of the parameters of the individual utility
functions, even when the transformations do not change the individual's underlying
preference ordering.
It is possible to reduce the domain to a single profile without being able to break
away from dictatorship, although the single-profile impossibility theorems substitute
two new criteria for Arrow's domain assumption. Without any new conditions we are
in the clear, if the domain P = {p} is a singleton: we can let f(p) be any member of
P(X) consistent with the Pareto criterion. IIA will be satisfied vacuously. (We won't
worry about dictatorship if p(l) =p(2) = ... =p(n), in which case Pareto implies that
everyone is a dictator.) However, the addition of a neutrality condition and a preference
diversity assumption to Arrow's list can precipitate an impossibility theorem for many
of these singleton domains. For any domain 2, we say thatf on P satisfies neutrality
if for arbitrary x and y in X and arbitrary profile p E 2, if x f(p) y then we must have
w >-f(q) z for any w and z and any q E P such that, for arbitrary i N, w qz holds if
and only if x ,Py, and z tq w holds if and only if y Px. Note that this includes the
case q =p, and hence we can test singleton domains for neutrality.
Suppose once again that P = {p} and that f is transitive-valued and satisfies the
Pareto criterion and neutrality. Consider the proof of Arrow's Theorem after the
ultrafilter lemma has been obtained. No part of the former requires P to have more
than one member. But can we prove that the collection U of decisive sets forf is an
ultrafilter? We have N E U by Pareto, and this gives us (1), which requires N to be
decisive (but not the empty set). By definition, any superset of a decisive coalition is
decisive, so we have (2). Neutrality implies that if coalition H is decisive for a pair then
it is decisive for all pairs. Therefore, we don't need the contagion lemma. Property (3)
requires the intersection of two decisive sets to be decisive. Note that the proof of (3)
in the ultrafilter lemma can be accomplished with a single profile, provided that there
is sufficient diversity of individual preference. Property (4) requires the complement
of a coalition to be decisive if the coalition itself is not decisive. The proof of (4)
employs three profiles, but we can get away with a single profile if we use additional
alternatives and the neutrality property. Hence, if we add to the Arrow requirements,
not only neutrality, but also a condition ensuring that p(l), p(2 ), p(3 ), etc., are so
related that we can establish (3) and (4), we can show thatf is dictatorial. The first
single-profile impossibility theorems are due to Parks (1976), Kemp and Ng (1976)
and Hammond (1976). Pollak (1979), Roberts (1980) and Rubinstein (1984) are also
important contributions to this literature.
70 D.E. Campbell and S. Kelly
The single profile theorem of Dutta and Sen (1996) concerns the properties of a
ranking of opportunity sets obtained by aggregating one ranking based on the highest
level of attainable utility and another based on the size of an opportunity set. They
obtain a dictatorship result: one of the criteria will be ignored. Section 8 contains a
discussion of a very recent impossibility theorem, Kaplow and Shavell (2001), that
employs only one profile and a non-Arrovian framework.
7. Relaxing independence of irrelevant alternatives
Weak IIA requires x (p)y if x ¥/(q) Y andp x,y} = q I {x,y}. Baigent (1987) showed
that if XI >4 and weak IIA is substituted for IIA, while retaining the other Arrow
conditions, then some individual has veto power. See also Campbell and Kelly (2000b),
which corrects a defect in Baigent's proof and extends the theorem to economic
environments.
Rather than assuming a modified version of IIA, we can look at an arbitrary
transitive-valued social welfare function and count the number of pairs of alternatives
{x,y} for which p {x,y} q {x,y} implies f(p) l {x,y} =f(q) {x,y} for all profiles p
and q, and f I x,y} is a non-dictatorial social welfare function satisfying the Pareto
criterion. Powers (2001) shows that this number cannot exceed 1/ + 1/(m-1),
where m is the cardinality of X. Powers assumes that m > 3, n > 3, and the domain
off has the free triple property. His proof is based on the one in Campbell and
Kelly (1995a), which establishes that if f is transitive-valued and satisfies Pareto
then f I x,y} satisfies non-dictatorship and IIA for at most the fraction 2/m of the
pairs x,y}.
For the rest of this section, there will be pairs {x,y} such that f(p)l x,y} is
conditional on p IY for some proper superset of {x,y}, and not just on p I x,y}. If we
simply drop IIA from the list of conditions, the other Arrow conditions are easily seen
to be consistent - and compatible with many other criteria such as neutrality, strong
positive responsiveness, and symmetric treatment of individuals. Here is a standard
example of a rule that violates IIA but has many desirable properties.
Example 7.1. Global Borda rule [Borda 1781)]: Assume that X is finite. For
simplicity, we define this rule on L(X)", so each of the n individuals has a linear
ordering over X. For each such individual, allocate m - 1 points to the alternative that
is at the top of his preference order, m -2 points for the alternative in second place,
and in general, m -j points for the alternative injth position in his preference ranking.
Then the social ordering is constructed by ranking x over y if and only if x's total
score (added over all n individuals) is greater than y's total. This gives us a transitive
social ordering because the ordering "greater than" on the real numbers is transitive. It
satisfies the Pareto criterion because if every individual strictly prefers x to y, then the
total score for x will exceed y's total score by at least n. The Borda rule is obviously
not dictatorial. [
The Borda rule is given an axiomatic characterization in Young (1974). IIA is not
one of the axioms, of course. Debord (1992) gives an axiomatic characterization of a
generalized Borda-type rule that is used to select k > 1 alternatives from X. The Borda
rule is one member of the family of positional rules, a family whose properties are
thoroughly analyzed in Saari (1994, 1996). See also the discussion of positional rules
in Pattanaik (2002, Chapter 7 in this Volume), Fishburn and Brams (2002, Chapter 4
in this Volume) and Saari (2002, Chapter 25 in Volume 2 of this Handbook).
The Borda ranking of x and y can differ in two situations even though the individual
orderings of x and y are the same in those two situations. Suppose n = 5 and m = 3.
Consider a simple profile:
1 2 3 4 5
x x x y y
y y y x x
The total score for x is 8 = 2 + 2 +2+ 1+ 1 and for y it is 7 = 1 + 1 + 1 + 2 + 2. Therefore

x ranks above y in the social ordering determined by the Borda rule. But consider a
different situation, with different preference orderings for persons 4 and 5:
1 2 3 4 5
x x x y y
y y y z z
The total score for x is 6 and the total score for y is 7. The social ordering of x and y
has reversed, even though each individual has the same ordering of x and y in this new
configuration as he did in the first situation. This is clearly a violation of IIA. Saari
(1994) has many more examples of this sort; many of his examples and theorems are
very surprising. See also Saari (1989, 2000a,b, 2002, Chapter 25 in Volume 2 of this
Handbook).
It has long been known that abandoning Arrow's (1951) IIA condition opens the
door to rules that are far from dictatorial. The Borda rule is a good example. With the
exception of Fleurbaey and Maniquet (2001) and the material discussed in the rest of
this section, the only departures from IIA in the welfarist literature - in which social
choice depends only on individual preferences for outcomes - are rules for which the
social ranking of x and y depends on the individual orderings over all of X, as in the
case of the global Borda rule. Identification of the entire feasible set before rejecting
even a single alternative is far too costly, however - we would not even expect this of
a single consumer choosing from a budget set in the absence of uncertainty. Bordes
and Tideman (1991, p. 184) put it more forcefully: the set of all candidates "is often
not really defined". We can still allow the social ordering of x and y to depend on at
least a few additional alternatives. But Fishburn (1973, p. 6) asks, on which additional
alternatives should we condition the social ordering of x and y? If for a given profile,
the social ordering of x and y depends on individual preferences on some superset
of {x,y}, then the disagreement among individuals that is supposed to be resolved by
the adoption of a social welfare function re-emerges in the form of conflict over the
selection of that superset. We can use the global Borda rule (Example 7.1) to show
how the social ordering of a pair of alternatives can depend on our choice of X. Let
the second table be our profile p. We wish to determine the social ordering of x and y.
If X = {x,y} then x ranks above y, but if X = {x,y,z} then y will rank above x.
Nevertheless, it is noteworthy that even a small departure from IIA allows the
construction of social choice rules that are far from dictatorial, and even allow majority
rule to play a key role - without spoiling transitivity or violating Pareto. Much of the
material in the rest of this section is from Campbell and Kelly (2000a).
A simple case is our earlier Example 3.4: select two alternatives v and w in advance.
If person 's ordering has v strictly preferred to w then the social ordering is the same as
person l's; otherwise the social ordering is the same as person 2's preference ordering.
Then to socially order x and y we only need to know the configuration of individual
preferences on the set {x,y,v,w}. This is a modest additional information requirement,
but it doesn't get us far enough from dictatorship, because no one other than individuals
1 or 2 has any influence on the social choice.
Now we define a family of rules - gteau rules - that can be substantially non-
dictatorial, in addition to satisfying Pareto and transitivity of the social ordering on
a full domain. Moreover, they constitute a minimal departure from IIA, in the sense
that the social ordering of an arbitrary pair only depends on one additional alternative
that is the same for all pairs. Assume X > 3. We define our general gteau rule f
by first choosing a distinguished element v in X, two individuals i andj, and a social
welfare functionf* that satisfies Pareto and IIA. (We could letf* be majority rule, for
example.) To define f(r) for arbitrary profile r in L(X) ' we let >- denote the strict
preference part off(r), and we let >-* be the strict preference part of f*(r). (For
expositional convenience, we assume that either x >-* y or y >-* x holds for any two
distinct members of X.) Let T(r), the top layer of f(r), be the set of alternatives
x in X such that x >-*v. B(r), the bottom layer off(r), is the set of alternatives x in X
such that v >-*x. To define f(r) we set
x - v >-y (and x >-y) if x belongs to T(r) and y belongs to B(r);
f(r) T(r) = r(i)l T(r) andf(r) B(r) = r(j)l B(r).
Clearly, f(r) is transitive and the Pareto criterion is satisfied. Note that will be non-
dictatorial iff* is, or if i andj are not the same.
Iff* is majority rule then we put all the alternatives that defeat v by a majority in the
top layer T(r) and then order T(r) internally according to person i's preferences. All
the alternatives that are ranked below v by majority rule go in the bottom layer, B(r),
which is then internally ordered by individual j's preferences.
We can modify the definition so that individuals i andj have less power. For example,
we could choose two individuals h and k, and split T(r) into S(r) = {x E T(r): x >-h v}
and T(r) \S(r). Then we could order S(r) according to i's preferences and order
T(r) \ S(r) according to individual k's preferences. However, Arrow's Theorem places
restrictions on the social ordering of the top layer. Consider the subfamily of profiles r
for which v is at the bottom of each individual's preference ordering. Because f*
satisfies Pareto, T(r) =X \ {v} for any such profile. If the social ordering of x andy can
depend only on individual preferences restricted to {v,x,y} then IIA will hold within
this special family of profiles. Arrow's Theorem tells us that the ordering of T(r) within
this family is dictated by some individual i. Say that person i is this local dictator.
Now, let p be any profile for which everyone ranks x and y above v. Then x and y
belong to T(p). There is a profile r for which v ranks at the bottom of each r(h)
and r I{v,x,y} =p I{v,x,y}. Because the social ordering of x and y can depend only on
{v,x,y}, we must have x and y socially ordered according to p(i) at profile p. A similar
restriction applies to B(p).
The gaiteau family takes us a small step away from IIA; but as we have just seen,
Arrow's Theorem still gives some special power to some individual. In fact, even if
we modify the Arrovian framework by replacing IIA with the far milder requirement
that for any two alternatives x and y, at least one member of X is irrelevant to the
social ordering of x and y, if the domain is full we can prove that some individual will
have the power to prevail against unanimous opposition in some situations. The new
condition is called independence of some alternative (ISA): for any two alternatives
x and y there is a proper subset Y of X such that for any two profiles p and q in the
domain, if p Y = q lY then f(p) {x,y} =f(q) {x,y}.
Information restriction theorem [Campbell and Kelly (2000a)]. Suppose that X
has at least three members andf is a social welfare function with domain L(X)N or
P(X)N. Iff is transitive-valuedand satisfies the Pareto criterion and independence of
some alternatives, then there is an individual i c N, two distinct alternatives x and y,
and a profile r such that
x -i y,y -j x for allj N\ {i}, and x >-y.
Given a rule f, say that Y is sufficient for {x,y} if for any two profiles p and q
in the domain,f(p) I{x,y } =f(q) I{x,y} if p IY = q Y. (Y can be empty when f {x,y}
is constant - a possibility for some x and y in economic environments). Note that
ISA is equivalent to the following: for any two (distinct) x,y EX there is some
z EX such that X \ {z} is sufficient for {x,y}. However, there can be more than one
sufficient set for {x,y}, and when the domain is full, the family of sufficient sets can
embody substantial restrictions on the possible departures from IIA, as the following
intersection principle shows. Note that it does not assume the Pareto criterion or any
type of transitivity property forf(p).
Intersection principle. Iff has a full domain, and Y and Z are each sufficient for
{x,y} then Y n Z is sufficient for x,y}.
Proof: Suppose that p I(Y n Z) = q I(Y n Z). Then there exists a profile r in the domain
such that r I Y =p Y and r IZ = q Z. We have f(p) l {x,y} =f(r) {x,y} because Y is
sufficient for {x,y}, and f(r) I{x,y} =f(q) {x,y} because Z is sufficient for {x,y}.
Therefore, f(p) {x,y} =f(q) I x,y}. l
If {x,y} is sufficient for {x,y} we say that the pair is self-sufficient. IIA can
be expressed by saying that {x,y} is self-sufficient for arbitrary x,y EX. We can
generalize IIA by specifying a family S{xy} of subsets of X that are sufficient for
arbitrary {x,y}. For finite X, the intersection principle implies that if for all x,y EX
the intersection of the members of S{,Xy equals {x,y} thenf satisfies IIA. This was first
proved by Blau (1971) for the special case S{xy} = {X \ {z}: z EX \ {x,y}}, although
Blau required f(p) (X \ {z}) =f(q) (X \ {z}), not just f(p) {x,y} =f(q) I{x,y}, if
p (X \ z}) = q (X \ z}). [Something very similar to the proof of the intersection
principle is a key step in the proof of the Kalai and Schmeidler (1977) impossibility
theorem for cardinalpreferences].
We conclude this section by reiterating that almost all of the social welfare functions
defined and discussed in the literature either satisfy IIA or violate both IIA and ISA.
There has been little research on the middle ground. One could argue that the set X
used to define the Borda rule (Example 7.1) is not the entire set of logically possible
alternatives, but is simply the current agenda - in other words, the set of feasible
alternatives. We could have X = {x,y,z} in one situation and X = {x,y} in another. Of
course, as we have already pointed out, the profile
1 2 3 4 5
x x x y y
y y y z z
leads to y >-x if we apply the Borda rule to X = {x,y,z}, but to x >-y if we apply
the Borda rule to X = {x,y}. However, for economic problems we can't use individual
preferences over the entire feasible set to socially order a particular pair of alternatives
because it is exceedingly costly, if not impossible, to identify the feasible set with
precision.
8. Modifications of the Arrovian framework
Close examination of the proof of Arrow's theorem reveals that the full strength of
each condition is not employed in the proof. For instance, Wilson's Theorem allows
us to replace the Pareto criterion with the assumption that f is nonimposed and
f l{x,y} satisfies Pareto for some choice of distinct x and y from X. Transitivity
can be relaxed: Blair and Pollak (1979) and Blau (1979) show that dictatorship is
still implied if each f(p) is merely assumed to be a semi-order, which is between
quasitransitivity and full transitivity in strength. Both results are generalized by
Fountain and Suzumura (1982). In fact, Wilson (1975) implies that there is a range
of intermediate transitivity properties that lead to Arrow's conclusion in the presence
of the other axioms. Similar surgery can be performed on IIA and on the domain
assumption. (However, we can't expect to be able to operate successfully on all the
conditions simultaneously.) Instead of pursuing this theme - an inspection of the proof
in Section 3 would be more profitable - we turn now to a brief discussion of several
departures from the full Arrovian framework. We consider in order: social choice
correspondences, probabilistic social choice, fuzzy social choice, a theorem on the
conflict between Pareto and the desire to use non-utility information about individual
welfare, consensus functions, social choice functions that select themselves, and finally
infinite societies.
We could attempt to obtain a satisfactory social choice rule by abandoning the
requirement that every profile map into an ordering on X, and instead ask for a
selection of alternatives from an agenda Y C X as a function of individual preferences
over the alternatives in X. The selection rule is called a social choice correspondence.
But we now have to specify the domain F of agendas (or feasible sets), in addition
to the domain P of preference profiles. (F is a collection of nonempty subsets of X.)
For each profile p e 7P and each Y E F the social choice correspondence C specifies
a nonempty subset C(p, Y) of Y. We say that C is rationalized by the social welfare
function f if for all Y E F and p 7'P,
C(p, Y) = {x G Y : x tf(p) y for all y E Y}
Not every social choice correspondence can be rationalized by a transitive-valued

social welfare function, so the correspondence approach to social choice offers
hope that we can satisfy all of Arrow's conditions - after translating them to the
correspondence framework. Deb (2002, Chapter 18 in Volume 2 of this Handbook),
provides a thorough treatment of social choice correspondences.
IIA is converted to independence of infeasible alternatives (IIF), which requires
C(p, Y) = C(q, Y) whenever p I Y = q I Y. IIF applied to social choice correspondences is
easier to defend than IIA because the former is implied by incentive compatibility: if
C(p, Y) is the set of equilibrium outcomes for some mechanism, and p Y = q I Y then
the set of equilibria for q and Y must be identical to the set of equilibria for p and Y.
Therefore, C(q,Y)= C(p,y). See Campbell (1992b,c) for details.
The Pareto criterion is converted to Pareto optimality: we have y C(p, Y) if x >-i y

for all i N and some x E Y. And C is non-dictatorial if for all i N there is some
p E P and Y 5 such that there exist x and y in Y with x >-iY and y C(p, Y).
Transitivity-valuedness off is replaced by Arrow's choice axiom (ACA), which
requires, for arbitrary profile p EP, C(p,Y)= Y n C(p,Z) whenever YZ F, Y C Z,
and Y n C(p,Z) X 0. If C(p,Y) = {x C Y: y -i x for all i E N implies y Y}, the set of
Pareto optimal alternatives in Y at p, then C satisfies IIF, Pareto optimality, and non-
dictatorship (even when F is the collection of all nonempty and finite subsets of X and
P = P(X)N) but not ACA. The addition of ACA to the list of requirements precipitates
an impossibility theorem - the conditions are inconsistent [Sen (1969, 1970a)]. That's
because ACA implies the existence of a transitive-valued social welfare functionf that
rationalizes C [Arrow (1959)].
When F contains all two-element subsets of X one can distill from C what
Herzberger (1973) terms the base relationf(p), for arbitrary p P, by setting x bf(p)y
if and only if x C(p,{x,y}). However, an advantage of working with C itself is
that internal consistency conditions, connecting C(p,Y) to C(p,Z) for subsets and
supersets Z of Y, are often easier to motivate and evaluate than transitivity-type
restrictions onf(p). Moreover, when C is rationalized by a social welfare functionf,
the transitivity properties of the f(p) can be derived from the postulated consistency
conditions for C. For instance, beginning with Plott (1973), a number of papers require
independence of C(p, Y) from the path taken to that set via choices made from two-
element (and other) subsets of Y. Various strengths of this condition lead to a variety
of near-transitivity conditions, lying between quasitransitivity and full transitivity, that
still imply dictatorship in the presence of IIF and Pareto optimality, although some
of the theorems employ strong Pareto optimality along with a somewhat weaker
path independence requirement. (C satisfies strong Pareto optimality if y ~ C(p, Y)
whenever there exists an x in Y such that x iy for all i EN and x -iy for some
i EN.) For details see Blair, Bordes, Kelly and Suzumura (1976) and Bandyopadhyay
(1984-1986, 1990). In a different vein, Nermuth (1992) proves an impossibility
theorem for multistage aggregation in the abstract algebraic aggregation model of
Wilson (1975).
Economic models often deal only with feasible sets that have far more than two
members. Grether and Plott (1982) take a small step in this direction by dropping
the assumption that every nonempty and finite subset of X belongs to . They
assume that a positive integer m is given, and F includes all finite subsets of X
with m or m+ 1 members, but no set with less than m members. They prove an
impossibility theorem when C satisfies ACA, IIF, Pareto, and non-dictatorship on
P(X)N. Campbell and Kelly (1994b) use the Grether-Plott specification of F to prove
Wilson's Theorem and also the Trade-Off Theorem for social choice correspondences.
Campbell (1995) treats economic environments, and Campbell and Kelly (1995b)
prove a correspondence counterpart to the extreme trade-off theorem presented at the
end of Section 4.
Gibbard, Hylland and Weymark (1987) place an interesting restriction on F: there is
Ch. I: Impossibility Theorems in the Arrovian Framework 77
assumed to be a status quo alternative x° in X that belongs to every member of F. In

that case there is a non-dictatorial social choice correspondence on P(X)N satisfying
ACA, IIF, and Pareto. However, the Gibbard-Hylland-Weymark example gives one of
the individuals enormous power, as they acknowledge. They also prove that unequal
treatment of individuals is inevitable in their framework. See also Yanovskaya (1991).
Feasible sets in economic models are seldom discrete. By taking F to be the family
of compact subsets (with nonempty interior) of some f-dimensional Euclidean space,
Le Breton and Weymark (2002b) exhibit a family of social choice correspondences
satisfying ACA, IIF, Pareto, and non-dictatorship on two domains on which Arrow's
impossibility theorem goes through for social welfare functions: the domain of
profiles of Euclidean preferences, and the domain of profiles of monotonic and
analytic preferences. Their rules are based on utility representations of individual
preferences. It has long been recognized that transitive-valuedness, Pareto, and non-
dictatorship can be satisfied on virtually any domain P by assigning to each profile p
in P an n-tuple ul,u2,....,u, of real-valued functions on X such that ui is a
utility representation of p(i) for i = 1,2, .. ., n. Then for any real-valued function W
on n-dimensional Euclidean space, we can define f by setting x y if and only
if W(ul(x), U2 (),,..., Un(x))> W(Ul(y), U2(y),..., u,(y)). Obviously, f is transitive-
valued. If W is monotonically increasing in its arguments thenf will satisfy Pareto. If
W is symmetric in its arguments thenf will be non-dictatorial, and will, in fact, treat
individuals symmetrically. However, IIF will typically fail with this technique. Because
each X E F is compact and has a nonempty interior, for the Le Breton and Weymark
domains, two orderings that agree on X must be identical over the entire space,
and hence have the same utility representation. That implies that the correspondence
C(p,X)={x EX: x f(p)y for all y cX}, based on f defined above, satisfies IIF, the
correspondence version of IIA.
The fixed agenda approach has F= {X}. In that case we can write C(p) instead
of C(p,X). We interpret X as the feasible set, and we select some alternatives
in X as a function of the profile. IIF and ACA are satisfied vacuously when
F= {X}, but Hansson (1969) shows that an impossibility theorem is precipitated if
the following Hansson independence condition is satisfied in addition to Pareto and
non-dictatorship: if x E C(p), y d C(p), and q I x,y} =p I x,y} then y C C(q). That is,
if alternative y is not chosen at profile p but x is chosen, then y cannot be chosen at
profile q if the individual orderings of x and y are the same at q as they are at p. There
exist social choice correspondences that violate Hansson independence, but which are
rationalized by a social welfare function satisfying IIA, as we show with the Pareto
optimal correspondence and the following two profiles p and q:
p(l) p(i) for i > q(l) q(i) for i >

x z x y
z y y x
Y x z
The Pareto optimal correspondence has C(p,{x,y,z})= {x,z} and C(q,{x,y,z})= {x,y}
in violation of Hansson independence. Hansson independence (or some close relative)
is used in a number of papers to prove counterparts to the theorems of Arrow and
Wilson. See Denicol6 (1985, 1993), Campbell and Kelly (1996b), and Peris and
Sanchez (1997). The key step is showing that, under a domain assumption that
is stronger than free triple, every social choice correspondence satisfying Hansson
independence is rationalized by a transitive-valued social welfare function satisfying
IIA. [See Campbell and Kelly (1996b)]. The oligarchy theorem (and related results)
for fixed agenda social choice are obtained by Peris and Sanchez (1998) and Sanchez
and Peris (1999) with a condition that is milder than Hansson independence. Peris
and Sanchez (2001) go beyond establishing the existence of dictatorship or oligarchy
or veto power, and investigate the relationship between C(p) and individuals' sets of
most-preferred alternatives at p.
Sen (1993) proposes a rejection decisiveness condition called independent deci-
siveness: for any H C N, if for every profile p such that x >-Py for all i E H there is a
profile s such that s {x,y} =p I {x,y} and y d C(s) then y ~ C(r) for any profile r such
that x >- y for all i e H. Independent decisiveness is violated by the Pareto optimality
correspondence. (For the two profiles p and q displayed in the table above, take
H = 1t}, s =p, and r = q.) Sen proves that independent decisiveness, Pareto optimality,
and non-dictatorship are incompatible if P equals P(X)N or L(X) N. Sen's Theorem
is intended to demonstrate that impossibility results can be obtained in the Arrovian
framework without any rationality condition; social choices need not be intermediated
by a social ranking. Denicol6 (1998) translates Sen's condition back into the social
welfare function framework, and then provides an example to show that the translated
independent decisiveness condition is weaker than IIA. Denicol6 also proves Arrow's
theorem with this weaker condition substituting for IIA, but states that within this
social welfare function framework, he can find no rationale for the weaker condition
that would not also justify IIA.
If we allow C(p) to be empty for some p and Y then it is possible to satisfy Hansson
independence, Pareto, and non-dictatorship on F = {X} and P =P(X)`'. In fact, each
condition is satisfied vacuously by letting C(p) be empty. Duggan (1997) gets an
impossibility theorem, strengthening Hansson (1969), by allowing C(p)=0, but only
for profiles p for which some close relative of p has a nonempty choice set.
Aizerman (1985) and Aizerman and Aleskerov (1995) review an alternative
approach to choice correspondences, developed primarily at the Institute for Control
Sciences in Moscow over two decades. Choice functions are not assumed to be
generated by an underlying binary relation - although that case is not ruled out. A key
role is played by the algebraic structure imposed on some special families of choice
functions, although some of these families are characterized by conditions that are used
in the conventional literature on the rationalization of a choice function by a binary
relation. Aleskerov (2002, Chapter 2 in this Volume), shows how this approach can
be extended to social choice, with an n-tuple of individual choice functions as input,
instead of an n-tuple of individual preference orderings.
To introduce the probabilistic approach to preference aggregation, we assume briefly

that N= {1,2,3} is a set of three partners in a restaurant and each member of X is a
restaurant decor. One solution to the problem of selecting a decor for the restaurant is
to choose one of the partners randomly, and let that partner decide on the decor - the
random dictator rule.
In general, a probabilistic aggregation rule is a function rT that maps each
profile p G L(X)N into a probability measure Jr(p) on L(X). In this context the Pareto
criterion requires that if x >-i y for all i E N at profile p, then the lottery Zr(p) only
assigns positive probability to members of L(X) that rank x strictly above y. The
probabilistic version of IIA requires the probability of x ranking socially above y to
be the same at p as it is at q if p {x,y} = q {x,y}. Of the following three rules, only
the third satisfies both IIA and Pareto.
Example 8.1. The domain of zr is L(X)N and .r(p) is the uniform probability
distribution at any profile p. That is, r selects a member of L(X) at random according
to the uniform distribution. For any distinct x and y in X, and any profile p, the
probability that x is ranked above y at p is . Therefore, IIA is satisfied, but for the
same reason Pareto is not. ·
Example 8.2. The domain of 3r is L(X)N, there are n >3 individuals, and X
has at least three members. At any profile p the rule T selects a member of
{p(l),p(2 ),... ,p(n)} at random according to the uniform probability distribution on
the set {p(l),p(2),... ,p(n)}. For any distinct x and y in X, let p be a profile for which
x -I y, p(1)=p(2)=p(3)=... =p(n - 1), andy >-, x. Because {p(l),p(2),.. . ,p(n)} is a
two-element set, the probability that x is ranked above y at p is . If q is another profile
such that q I{x,y} =p I x,y} but q(l) X q(2 ) = q(3) ... = q(n - 1), then the probability
that x is ranked above y at q is because q(1), q(2 ),. . , q(n)} is a three-element set.
This rule violates IIA, but it satisfies Pareto because we always have ar(p)=p(i) for
some i. ·
Example 8.3. The domain of r is VN for any subset V of L(X). The rule r
selects a member i of N = 1,2,.. ., n} at random according to the uniform probability
distribution and then sets nr(p)=p(i). IIA and Pareto are both satisfied. ·
BarberA and Sonnenschein (1978) prove that for every :r satisfying Pareto and IIA
there is a probability measure yu on the family of subsets of N such that for each
profile p, and for arbitrary x, y EX, the probability of x socially ranking above y is
yi({i E N: x >-iy}). (Because Mu is a probability measure it is subadditive, which means
that t(H UJ) < 1 (H)+ t(J) for all subsets H and J of N.) McLennan (1980) shows
that t has to be additive, not merely subadditive, if X has at least six alternatives.
Subadditivity disqualifies rules that select the majority rule relation with probability 1
if it is transitive, and which select a member of {p(i): i E N} randomly when majority
rule is not transitive at p. The BarberA-Sonnenschein-McLennan result precipitates
Arrow's theorem as a corollary. Bandyopadhyay, Deb and Pattanaik (1982) prove the
80 D.E. Campbell and 1S. Kelly
Oligarchy Theorem for probabilistic social choice. BarberA and Valenciano (1983)
extend the Bandyopadhyay-Deb-Pattanaik theorem by considering functions :r that
directly determine, for arbitrary p, x and y, the probability that x will be socially
ranked above y. Chapter 24 in Volume 2 of this Handbook [Coughlin (2002)] provides
a comprehensive treatment of the probabilistic approach.
Random dictatorship may be a satisfactory form of conflict resolution for some
problems, but it is inappropriate for many standard models of resource allocation.
Suppose, for example, that X is the set of feasible allocations in an n-person exchange
economy, and P is the set of profiles of economic preferences. In particular, p(i) is
selfish and monotonic for all p E P and all i C N. If a member p(j) of {p(i): i N} is
chosen randomly and we setf(p) =p(j) then we will have x >-f() y for all y E X {x},
where x is the allocation that assigns everything to individual j.
Lain6, Le Breton and Trannoy (1986) and Weymark (1997) do not so much depart
from the Arrovian framework as provide a new and interesting interpretation. Let X
be a set of events. For arbitrary p E P, x >-iy represents the statement "Individual i
believes that event x is more likely than event y". Then f(p) is interpreted as the
consensus probability. The free triple property cannot be assumed: if z is the event "x
and y" then z cannot be less likely than x or than y, and thus z cannot be positioned
below x or y in p(i). In that case, {x,y,z} is not a free triple. But there are enough
chains of free triples to yield a version of Arrow's theorem for which the dictatorship
is slightly - but only slightly - qualified.
The "fuzzy social choice" approach requires the selection of a fuzzy social
ordering as a function of the profile. Fuzziness might be expected to side-step logical
impossibility because of its smoothing properties, but the results are mixed. The
conclusions of theorems depend on how one formulates the analogue of transitivity
and whether one works with fuzzy strict preference or fuzzy weak preference. That is
itself a negative result: a satisfactory social choice process is one that is robust with
respect to small changes in the way that the criteria are formalized. The key papers in
the literature include: Barrett, Pattanaik and Salles (1986, 1990, 1992), Dutta (1987)
and Banerjee (1994). Assuming a fuzzy or uncertain outcome set X, Campbell and
Kelly (1996a) prove a trade-off theorem. Candeal and Indurdin (1995) and Garcia-
Lapresta and Llamazares (2000) depart even farther from the Arrovian framework,
to characterize families of fuzzy social choice rules satisfying one or two simple
conditions - neutrality, for example. See Salles (1998) for a survey of the subject.
Kaplow and Shavell (2001) prove a striking new impossibility theorem, employing
only a single profile: a social utility function F maps each outcome x into a real
number. It is said to be individualistic if F(x) depends only on individual utility levels
at x. Assuming that there is at least one private good k in which F is continuous and
which each individual prefers to have more of, ceteris paribus, Kaplow and Shavell
prove that F must violate the Pareto criterion if it is not individualistic. In fact, their
proof never uses the fact that F is a function, and hence generates a complete and
transitive binary relation. One could replace F with a binary relation ~ that ranks
outcomes as a function of individual utilities and perhaps other non-utility information
as well. The relation t need not be transitive; the Kaplow-Shavell proof goes through
without modification. Perhaps more significantly, they assume full continuity of F(x) in
private good k, but lower continuity suffices - i.e., if x >-y then there is a neighborhood
V of y such that x > z for all z in V. The significance of this weaker condition arises
from the fact that lower continuity and acyclicity of t are sufficient for the existence
of a maximal alternative on a nonempty compact set [Walker (1977)].
Inspired by Arrow's work, a number of scholars have obtained impossibility
theorems in contexts arising from issues in biology and chemistry. N represents a set
of n different types of observations on an object or a family of objects. A profile p
identifies a specific observation p(i) for each i N. For example, if the objective is
to draw a tree diagram that is an estimate of the evolutionary history of a particular
species, p(i) could be a (partial) tree diagram based on data from region i. If T is the
family of all trees that have the properties necessary for representing an evolutionary
history, then the function mapping TN into T gives the estimatef(p) for eachp E TN.
In this literature the rules f are called consensus functions, and they have been used
to analyze molecular sequences, as in Day and McMorris (1992)], and evolutionary
histories as in McMorris and Neumann (1983). See Barth6lemy, Leclerc and Monjardet
(1986) for an introduction and survey. The results cannot be obtained directly from
Arrow's theorem or its relatives, even when T is isomorphic to a superset of L(X)
because there is an additional restriction. The function must map TN into T, not into
the set of trees that is isomorphic to L(X).
Why would IIA, the Pareto criterion, and non-dictatorship be imported into the
analysis of consensus functions? A dictatorial rule is one that ignores the data in all
categories but one, and that seems to be unscientific. The Pareto criterion takes the
form of a reasonable unanimity property: If p(l) =p(2)=... =p(n) then f(p) =p(l).
Notable contributions to the consensus function literature are: McGuire and Thompson
(1978), McMorris and Neumann (1983), Barth6lemy, McMorris and Powers (1991,
1992, 1995), McMorris and Powers (1993), and Powers (1996). These papers differ
with respect to the assumption about the structure of the members of T, and in some
cases with respect to the way that IIA is incorporated. Under the supposition that T
is a set of equivalence relations, Mirkin (1975) proved an oligarchy theorem: there
is a nonempty subset J of N such that, for arbitrary p E TN, attributes x and y are
equivalent according to f(p) if and only if they are equivalent according to p(i) for
each i E J. This result was generalized to a class of value relations by Leclerc (1984).
A number of contributions to the consensus function literature relax the Arrovian
conditions and add new ones, to derive counterparts to majority rule and the median
rule. See for example: Margush and McMorris (1981), Day and McMorris (1985,
1992), McMorris and Powers (1991), Barth6lemy and Janowitz (1991) and McMorris
and Powers (1995).
Koray (2000) reaches the conclusion of Arrow's theorem by a much different route
than any other treatment of social choice. He begins with a social choice function,
which selects a member of the outcome set as a function of individual preferences,
which are assumed to be linear. The rule is unanimous if it selects the alternative that
is at the top of everyone's preference ordering whenever that happens. Koray seeks a
member of the family of unanimous rules which, when used to select a social choice
function for society, will select itself. Attention is also restricted to rules with a strong
neutrality property, which allows the social choice functions under consideration to
be defined on many outcome sets; without this property one can't even address the
question, "Does the rule select itself"?
Consider a three-person society with x, y and z as the feasible outcomes. Let profile p
be as follows:
1 2 3
x y z
y z x
z x y
We will apply the following two social choice functions g and h:

g selects the majority winner if there is one; and otherwise selects the majority
winner from among the top two alternatives in person 2's ordering.
h selects the majority winner if there is one; and otherwise selects the top ranked
alternative of person 1.
Note that there is a voting cycle x >-y >-z >-x at p. There is no majority winner, so
g(p)=y and h(p)=x. Now, we can use that information to see which social choice
rule would be selected by g at p, and which would be selected by h at p: because
persons 1 and 3 both strictly prefer x to y at p, each would strictly prefer h to g at
p. Because person 2 strictly prefers y to x she would strictly prefer g to h at p. The
resulting profile is
1 2 3
h g h
g h g
Two of the three individuals prefer h to g, so both of these rules would select h. Note
that h selects itself at profile p, but g does not. Koray proved that a unanimous and
neutral social choice function selects itself at every profile if and only if it is dictatorial.
(Inverse dictatorship is neutral and self-selecting, but it violates unanimity). It is easy to
see why a dictatorial rule is self-selecting: suppose that k always chooses the alternative
that is at the top of person l's ordering. Then at any profile, there will be no social
choice function that person 1 prefers to k. Therefore, k will select itself. Barbera
and Jackson (2000) use self-selection to single out majority rule in a model with a
different structure than the Arrovian framework and with a less demanding notion of
self-selection than Koray's.
If N is infinite, there exists a free ultrafilter on N. An ultrafilter U is free if nu, the

intersection of all the members of U, is empty. Fishburn (1970) was the first to show
that a free ultrafilter can be used to define a social welfare function satisfying all of
Arrow's conditions for any infinite society N: set x By if and only if the set {i E N:
x tiy} belongs to U. The resulting rule obviously satisfies IIA, and it satisfies Pareto
as a consequence of parts (1) and (4) of the definition of an ultrafilter. For any ultrafilter,
it is easy to show that individual i E N is a dictator for the rule f just defined if and
only if {i} e U. Hencef is non-dictatorial when U is free. (If {i} E U then i J c N
implies N \J e U by (2) because {i} c N \J. Therefore, every member of U contains
i by (1), contradicting the fact that U is free.) Finally, to prove thatf(p) is transitive,
suppose that x y t z. Then I = {i E N: x iy} and J={i C N: y ti z} both belong
to U, and thus InJ belongs to U by (3). Therefore, {iEN: xtiz}, a superset of
I n J, belongs to U by (2). We then have x z by definition. [See also Lauwers and
Van Liederkerke (1995)]. The technique that we have just described won't work with
finite N because no finite set admits a free ultrafilter, as we show in the paragraph
following the proof of Arrow's impossibility theorem (see p. 51).
Suppose that N is an interval in the real line. Kirman and Sondermann (1972)
show that iff is a transitive-valued social welfare function on a full domain, and
it satisfies IIA and Pareto, then for any positive number 6, however small, there is a
decisive coalition of Lebesgue measure less than 6. There may not be a dictator, but
there are arbitrarily small decisive coalitions, and that seems almost as unacceptable
as dictatorship. (In fact, Kirman and Sondermann prove their theorem for atomless
measure spaces in general.)
A free ultrafilter is a highly nonconstructive mathematical object, and hence it puts
substantial limits on any social welfare function satisfying Arrow's conditions for an
infinite society. Building on Armstrong (1980, 1985, 1992), and assuming an arbitrary
(possibly infinite) society, Mihara (1997a) proves that a transitive-valued social welfare
function cannot satisfy IIA, Pareto, and anonymity - i.e., symmetric treatment of
individuals - if the domain satisfies a modest richness condition.
Suppose that N is countable. Mihara (1997b) proves that a transitive-valued social
welfare function on a "rich" domain is dictatorial if it satisfies Pareto and IIA and
is computable. Lewis (1988) was the first to use computability to extend Arrow's
theorem to infinite societies. [See also Kelly (1988) for a discussion of computational
complexity in social choice.] Mihara (1999) relaxes the notion of computability, and
exhibits a social welfare function satisfying Arrow's conditions that in fact can be
computed. Mihara also gives an interesting justification for employing an infinite
society model: if there is a finite number of agents but an infinite number of possible
states of the world, yet to be realized, each member of N can be interpreted as a
particular individual in a particular state. In that context, a small decisive coalition
need not be an affront to democracy. For countable N and a connected T 1 space X
that is also locally connected, Campbell (1992c, p. 110) proves the following: iff is
a non-constant and transitive-valued social welfare function satisfying IIA then there
is some individual i E N such that eitherf(p) =p(i) for every profile p in the domain,
or else f(p)=p(i)- 1 at every profile. (A full domain is not required, but something
stronger than free triple is assumed).
Diamond (1965) considered the problem of ordering the space of infinite utility
streams. This becomes a social choice problem when we view N, the set of positive
integers, as the society, with i N denoting generation i, and ui as the utility of that
generation. Diamond proved that a complete and transitive binary relation cannot treat
generations equally if it is continuous in the product topology and monotonic, which
requires u=(ul,u2 ,... ) to rank strictly above vu=(ul, 2 ,...) if Ui > Ui for all i and
ui > ui for some i. Shinotsuka (1998) showed that both monotonicity and transitivity
can be dispensed with. He proves that the null ordering (universal indifference) is
the only continuous binary relation that treats individuals symmetrically. Moreover,
Shinotsuka only requires continuity in the Mackey topology, which is much less
demanding than the product topology.
9. Concluding remarks
Logical inconsistency is a feature of even ery short lists of conditions - conditions

that capture only a small part of the intuitive properties that we would like a rule to
have. For example, in many situations, for most alternatives and nearly all individuals,
we would want at least some rough equality of treatment of individuals, but we often
only ask for non-dictatorship, or the absence of an oligarchy, or something similar
and very weak. [Young (1994) abounds with applications in which fairness is one of
the key considerations.] There appears to be no chance of finding rules that come
remotely "close" to embodying the spirit of all the appropriate criteria. The evidence
of fifty years of research since Arrow discovered his theorem is that there is no ideal
aggregation procedure that can be used for all social choice problems.
For a specific social choice problem, one must assess the appropriateness of each
aggregation criterion, by taking into consideration the context in which the group
choice is to be made. [See Kelly (1978, pp. 159-161).] Arrow's formal system has
many different possible interpretations of the primitive notions, like X and N. Whether
or not transitivity or IIA is desirable is very sensitive to the interpretation of these
primitives. For most social choice problems, at least one of Arrow's conditions will be
inappropriately strong. Therefore, the response to Arrow's theorem could be to give up
the attempt to find one framework that covers every application. Instead, the approach
would be ad hoc, using a different set of conditions for different social choice contexts.
This is in fact the path that many social choice theorists have taken in recent years.
Notable examples are: fair allocation [Thomson (2002, Chapter 26 in Volume 2 of this
Handbook)]; serial cost sharing [Moulin (2002, Chapter 6 in this Volume)]; inequality
and poverty measurement [Dutta (2002, Chapter 12 in this Volume)]; and variable
population problems [Blackorby, Bossert and Donaldson (1995, 2002, Chapter 11 in
this Volume)]. In fact, almost all of the other chapters in the two volumes of this
Handbook could be mentioned here.
The literature cited in the previous paragraph embraces a very large number of
applications, and most of them identify a social choice procedure satisfying a list
of conditions considered appropriate for the context at hand. The value of these
specialized approaches stems from the fact that each assumes a lot of structure for
the feasible set X and for individual preferences. This structure allows the researcher
to express criteria that are somewhat different from Arrow's. But much of this literature
presents (1) impossibility theorems; or (2) characterization theorems, which are then
just one additional criterion away from an impossibility result; or (3) demonstrations
that the selection of choice procedures that satisfy criteria lists are extremely sensitive
to small details in the specification of the context and the criteria. One of the authors
of this chapter is more sanguine about the value of these exercises. He feels that the
researcher will develop an intuition that will enable her to recommend good, if not
best, procedures for particular social choice problems. The other author believes that
even in these restricted contexts there will always be reasonable criteria violated by
every rule; we will not be able to identify "good" outcomes as the result of applying
"good" social choice procedures.
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Chapter I

IMPOSSIBILITY THEOREMS IN THE

Arrow, impossibility, information, Pareto, trade-off

JEL classification: D6, D7

Arrow's Theorem [Arrow (1950, 1951, 1963)] on the aggregation of individual

that an individual be unable to profit from strategic misrepresentation of his or her

2. Definitions and framework

x >-y z implies x >-z.

(A) P({x, y, z}) = P({x, y, z})N or (B) P({x, y,z)}) = L({x,

r I{x,z} =p {x,z}, and r {y, z} = q {y, z}, and x - y for all J

3. Fundamental lemmas and Arrow's theorem

HnJ H\J N\H

rl {y,z} =pl {y,z}, and r {x,z} = q x,z}, and x >jy forallj J

HnJ H\J J\H N\(HUJ)

q[ {x,y} = rl x,y},ql {y,z} =pl{y,z}, and x >q z for all i in N.

so we can select a coalition H e U of smallest cardinality. We have IHI > 0 because

4. Relaxing the Pareto criterion

satisfies nonimposition if Y is a component off. Then Wilson's Theorem is applied

has a dictatorialcomponent with more than tm alternatives, or else the fraction oJ

The independence theorem. XI = m. Let B3 be any positive integer such that

Then x-y>-z>-x. Nurmi (1999) presents a large variety of voting paradoxes,

(x >-P y implies z t>q w) and (w >-q z implies y >-P x),

6. Relaxing the domain condition

individual preference is characterized by a single parameter. This work is discussed

Note that n- 1 individuals prefer xl to x 2, n- 1 individuals prefer x2 to X3, and in

Consider an arbitrary set X, not necessarily a subset of Euclidean space. Suppose

7. Relaxing independence of irrelevant alternatives

The total score for x is 8 = 2 + 2 +2+ 1+ 1 and for y it is 7 = 1 + 1 + 1 + 2 + 2. Therefore

x - v >-y (and x >-y) if x belongs to T(r) and y belongs to B(r);

f(r) T(r) = r(i)l T(r) andf(r) B(r) = r(j)l B(r).

x -i y,y -j x for allj N\ {i}, and x >-y.

8. Modifications of the Arrovian framework

C(p, Y) = {x G Y : x tf(p) y for all y E Y}

Not every social choice correspondence can be rationalized by a transitive-valued

The Pareto criterion is converted to Pareto optimality: we have y C(p, Y) if x >-i y

assumed to be a status quo alternative x° in X that belongs to every member of F. In

p(l) p(i) for i > q(l) q(i) for i >

To introduce the probabilistic approach to preference aggregation, we assume briefly

We will apply the following two social choice functions g and h:

If N is infinite, there exists a free ultrafilter on N. An ultrafilter U is free if nu, the

Logical inconsistency is a feature of even ery short lists of conditions - conditions

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