Hal Varian Quotes

Arrow’s Impossibility Theorem is quite surprising. It shows that three very plausible and desirable features of a social decision mechanism are inconsistent with democracy: there is no “perfect” way to make social decisions. There is no perfect way to “aggregate” individual preferences to make one social preference. If we want to find a way to aggregate individual preferences to form social preferences, we will have to give up one of the properties of a social decision mechanism described in Arrow’s theorem.

Schumpeter emphasizes a “demand-side” explanation for such clustering of innovation. One might also consider a complemen tary “supply-side” explanation: since innovators are, in many cases, working with the same components, it is not surprising to see simultaneous innovation, with several innovators coming up with essentially the same invention at almost the same time. There are many well-known examples, including the electric light, the airplane, the automobile, and the telephone.

Google will make us more informed. The smartest person in the world could well be behind a plow in China or India. Providing universal access to information will allow such people to realize their full potential, providing benefits to the entire world.