He has made the uncertainty of the market central to economic theory: Who is Kenneth Arrow?
He is one of the architects of the establishment of uncertainty in economics. He stated that a past-future vision is needed for the functioning of the markets, which he says cannot be complete. A full market is a market in which "complete" information is available. Therefore, no market is complete.
Arrow's interest is in how we make decisions and live with those decisions under conditions of uncertainty. According to him, we make our decisions out of ignorance, not absolutely. The opposite of rejecting a hypothesis under conditions of uncertainty is not accepting it, it is failure to reject it. (see: failed to reject) You cannot accept a hypothesis unless your probability of being wrong is zero (statistical certainty).
Kenneth Joseph Arrow (23 August 1921 – 21 February 2017) was an American economist, mathematician, writer, and political theorist. He was the joint winner of the Nobel Memorial Prize in Economic Sciences with John Hicks in 1972.
US economist. He made important studies on the "welfare economy". He was born in New York. After completing his undergraduate degree in mathematics at the City College School of Social Sciences in New York in 1940, he earned a graduate degree in Mathematics from Columbia University in 1941. He served as an air officer in the American Air Force from 1942-1946. Between 1947 and 1949, he worked as a researcher in the Cowles Commission, which made economic research. After 1948, he worked as an assistant in economics and statistics, first at the University of Chicago and then at Stanford University for one year. After receiving his PhD in economics from Columbia University in 1951, he became a faculty member at Stanford University. He was promoted to professor in 1953 and chaired the economics department from 1953 to 1956. He served on the US Government's Economic Advisory Council in 1962. He taught at Harvard University from 1968-1974, then returned to Stanford University. He continues his studies at Stanford University.
Arrow, who received the Nobel Prize in economics with John Hicks in 1972, has twelve published books and over one hundred and fifty articles. He is best known for his work on the "welfare economy". In his book Social Choice and Individual Values, published in 1951, he mathematically proved the impossibility of drawing a social welfare function linearly related to personal preferences. He worked on the mathematical conditions necessary for general equilibrium analysis.
WORKS (mainly):
Social Choice and Individual Values, 1951,
Studies in the Mathematical Theory of Inventory and Production (with S. Karlin and H. Scarf), 1958,
General Competitive Analysis (with F.H. Hahn), 1971,
Essays in the Theory of Risk-Bearing, 1971,
The Viability and Equity of Capitalism, 1976,
Studies in Resource Allocation Processes, 1977.
https://www.nobelprize.org/prizes/economic-sciences/1972/arrow/biographical/