“I was concerned with the fact that firms in the modern world typically had many owners (shareholders). If one ignored the time dimension, this posed no problem; each owner was interested in maximizing profits, and therefore they would all make the same choice. In the more general temporal situation, each owner would want to maximize expected profits. But the owners might easily hold different expectations. Therefore, they would not agree what investment policy would be optimal.” – Kenneth J. Arrow
This week we are excited to feature The Kenneth J. Arrow Lecture Series, edited by Joseph E. Stiglitz, and are giving away free copies of the first three books in the series (Creating a Learning Society: A New Approach to Growth, Development, and Social Progress, by Joseph Stiglitz and Bruce Greenwald; Speculation, Trading, and Bubbles, by José Scheinkman; and The Arrow Impossibility Theorem, by Eric Maskin and Amartya Sen) in our book giveaway! Today, we are proud to present an article written by Kenneth J. Arrow and included in Sen and Maskin’s The Arrow Impossibility Theorem in which Arrow looks back on the steps by which he came to prove his impossibility theorem for social choices.