In Memoriam: Kenneth J. Arrow (1921-2017)

Kenneth J. Arrow

Photo credit: L.A. Cicero in Stanford News

Kenneth J. Arrow, widely recognized as one of the 20th century’s leading economists and decision analysts and a 1972 recipient of the Nobel Prize for Economics, passed away on Feb. 21 at his home in Palo Alto, Calif., not far from Stanford University where he was a member of the faculty for more than 30 years. He was 95.

Dr. Arrow shared the Nobel Prize with Sir John R. Hicks for the development of theories underlying the assessment of business risk and government economic and welfare policies. Dr. Arrow’s interest in operations research dated back to the 1950s, and he played a major role in creating the Department of Operations Research at Stanford University.

In 1986, Dr. Arrow was awarded the John von Neumann Theory Prize by ORSA and TIMS (which later merged to create INFORMS) for his “fundamental and sustained contributions to theory in operations research and the management sciences.”

Dr. Arrow grew up in and around New York City. After graduating from the City College of New York, he continued his studies at Columbia University, first in mathematics and then in economics, though his primary interest at that time was mathematical statistics. He served as a weather officer during World War II and, after the war, returned to graduate study and research in mathematical economics at the Cowles Commission for Research in Economics at the University of Chicago. He also consulted at the RAND Corporation, where he first formulated the theory of social choice and proved his celebrated “Impossibility Theorem” of group decision-making. This material was the basis of his doctoral dissertation, and the subsequently published book, “Social Choice and Individual Values.”

At RAND, Dr. Arrow also was the co-developer of the central concepts of dynamic inventory theory with Jacob Marschak and Theodore E. Harris, resulting in a 1951 paper in Econometrica. In 1958, he published the classic study entitled “Studies in the Mathematical Theory of Inventory and Production” with Samuel Karlin and Herbert Scarf. In addition, Professor Arrow was among the first researchers to note the existence of the learning curve.

Professor Arrow was a member of the faculty at the University of Chicago (11948-1949), Stanford University (1949-1968, 1979-1991), and Harvard University (1968-1979). He authored more than 200 papers and 12 books. His many honors include the National Medal of Science (2004); John Bates Clark Medal of the American Economic Association; president of the Econometric Society and American Economic Association; elected membership in the National Academy of Sciences and the American Philosophical Society; and honorary degrees from the University of Chicago, The City University of New York and University of Vienna.

“Kenneth Arrow was one of the greatest economists,” John Shoven, a professor of economics at Stanford, told Alex Shashkevich of the Stanford News. “But he was also humble, warm and a great friend to all of us at Stanford.”

In the same article, Alvin Roth, a Stanford professor of economics, described Arrow as “an Albert Einstein of economics.” Said Roth: “Ken was a giant in an astonishing way.”

Sources: INFORMS, Stanford News