collective choice

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The process of aggregating individual preferences into social preferences in order to make a social (or collective) choice from a set of alternatives. The most frequently encountered collective choice process is majority voting. Alternatives to majority voting include the Borda count (if there are n alternatives then each voter's first choice is given n points, the second choice n – 1, and so on; the alternative with the most points is chosen) and approval voting (each voter can vote for any number of options; the option with the most votes is chosen). Collective choice also refers to the branch of economics that studies the properties of these processes. Two fundamental results are the median voter theorem and May's theorem. The latter determines that majority voting is the only process to satisfy a set of desirable conditions when a choice must be made from just two alternatives. When there are more than two alternatives the Condorcet paradox shows that majority voting can lead to intransitive social preferences. It is then not possible to select a preferred alternative. The failure of majority voting to function perfectly in all circumstances is representative of a general failure of collective choice processes. Arrow's impossibility theorem proves that there is no perfect collective choice process that can aggregate all possible individual preferences in all circumstances. An alternative perspective views collective choice being made through a social welfare function that has individual utility levels as arguments. A collective choice is made by confronting the alternatives with the social welfare function and choosing the option yielding the highest level of welfare. If interpersonal comparisons of utility cannot be made then the construction of a social welfare function faces the same impossibility as any other collective choice process. See also paradox of voting; voting.

Subjects: Economics.

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