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Social choice theory is a branch of welfare economics that extends the theory of rational choice to collective decision-making. [1] Social choice studies the behavior of different mathematical procedures (social welfare functions) used to combine individual preferences into a coherent whole.
The linkage of mathematics and sociology here involved abstract algebra, in particular, group theory. [12] This, in turn, led to a focus on a data-analytical version of homomorphic reduction of a complex social network (which along with many other techniques is presented in Wasserman and Faust 1994 [ 13 ] ).
Arrow's theorem assumes as background that any non-degenerate social choice rule will satisfy: [15]. Unrestricted domain — the social choice function is a total function over the domain of all possible orderings of outcomes, not just a partial function.
In a 1938 article, Abram Bergson introduced the term social welfare function, with the intention "to state in precise form the value judgments required for the derivation of the conditions of maximum economic welfare." The function was real-valued and differentiable. It was specified to describe the society as a whole.
Transformation problem: The transformation problem is the problem specific to Marxist economics, and not to economics in general, of finding a general rule by which to transform the values of commodities based on socially necessary labour time into the competitive prices of the marketplace. The essential difficulty is how to reconcile profit in ...
Roy's identity reformulates Shephard's lemma in order to get a Marshallian demand function for an individual and a good from some indirect utility function.. The first step is to consider the trivial identity obtained by substituting the expenditure function for wealth or income in the indirect utility function (,), at a utility of :
In some cases economic predictions in a coincidence of a model merely assert the direction of movement of economic variables, and so the functional relationships are used only stoical in a qualitative sense: for example, if the price of an item increases, then the demand for that item will decrease. For such models, economists often use two ...
Economic Sociology. New York: Academic Press. Richard Swedberg. 1990. Economics and Sociology: Redefining Their Boundaries: Conversations with Economists and Sociologists. Princeton University Press. ISBN 0-691-00376-9, ISBN 978-0-691-00376-4 Description and chapter-preview links, pp. v-vi. Richard Swedberg. 2007. Principles of Economic ...