“The economics of insurance, medical care, prescription drug testing — to say nothing of bingo and the stock market — will never be the same after Arrow.” That was the pronouncement of economist Paul A. Samuelson when Kenneth J. Arrow won the Nobel Prize in Economic Sciences in 1972. Arrow was a giant among economic theorists, and rarely have such abstract theories penetrated so deeply into the daily practice of markets, contracts, and voting systems.
Arrow died on Feb. 21 at the age of 95, we note with sadness. He was the coauthor of the 1986 book Social Choice and Multicriterion Decision-Making, one of several books that extended and teased out implications of the central theoretical insight on which his work was based: that majority voting based simply on individual preferences cannot lead to optimal results. This result, which Arrow and his colleagues showed with mathematical rigor, opened up an entirely new scholarly realm: social choice theory. As the New York Times obituary astutely put it, “The theorist who in the 1950s proved that perfectly competitive markets could exist as a matter of mathematical logic spent much of the rest of his career showing how far short of perfection actual markets fall.”
In addition to that book, Arrow also contributed to the 2013 collection Occupy the Future, and is included in various editions of Lives of the Laureates. Various members of our staff had contact with him over the years as well. He was very much in demand as an endorser of books that we published, and those who requested his imprimatur in that capacity report that he was almost always willing to help out. A true gentleman: he will be missed.
(Photo credit: Linda A. Cicero / Stanford News Service – Stanford News Service)