CHAPTER 1 - INTRODUCTION

Abstract

Social choice theory provides theoretical foundations to the neoclassical approach to democracy, a rapidly developing field which is referred to as “public choice,” and to welfare economics in general. To solve the possibly very sharp opposition of contradictory opinions, social choice theory takes an axiomatic route—it explores systematically all conceivable rules by which all potential conflicts are each given one particular resolution. Such rules are called social choice functions or correspondences. The relevance of this approach to collective decision crucially depends on the agents' willingness and ability to bargain. Modern modelization of collective decision-making always involves both normative features—prescriptive value judgements as represented by social choice mappings, and positive features—strategic behavior as represented by game-theoretic equilibrium concepts. The concept of implementation proves to be central for describing the relationship between the normative—in terms of equity or efficiency axioms—and the positive—in terms of how utility-maximizing agents can be expected to distort their messages—properties of voting methods.