7 ms·

Another example of the Nash equilibrium being worse than the group optimum is some examples of Tragedy of the Commons, things like overfishing. It's possible to

Another example of the Nash equilibrium being worse than the group optimum is some examples of Tragedy of the Commons, things like overfishing. It's possible to create a model that shows that a more regulated environment leads to more fish per individual than the Nash equilibrium. I don't think it's appreciated enough that some forms of regulation actually do make things better for everyone, and that acting only in one's own self-interest can lead to results that are provably worse for your own self-interest.

peller 10y ago
I fully agree with your point, but especially for the specific example you've raised, I think there are some very difficult complications that arise from the (lack of an effective) current global governance model. For instance, regulations are mostly only effective if they're enforceable. With fishing taking place largely in international waters, and as I understand it, enforcement falling upon the coast-guard-equivalent of whichever country's flag the boat is flying, enforcement would be very difficult. As far as implementing better regulations, any single nation implementing the good regulations would effectively be putting their own industry at an economic disadvantage (and by extension, their citizens who must pay for the more limited supply) compared to the more lax nations. We see this with the global climate change debate too; basically every single nation needs to agree at the same time for global progress to be made. Edit: clarified the first sentence.
- mikeash 10y ago
  There isn't much of a global governance model currently. The United Nations does a bit, but for the most part it's just anarchy between nations. Thus, it's really hard to get them to cooperate when the incentives push them to defect.
  - peller 10y ago
    Agreed. The other route which seems popular are the "free trade" agreements, but so long as it's corporations writing them, as far as I can tell such deals are moving in the opposite direction of what would be best for the environment and the vast majority of citizens of the world.
WildUtah 10y ago
some forms of regulation actually do make things better for everyone Best example is that property rights are such a form of regulation. When it comes to fisheries, wildlife, open public lands, air pollution, and intellectual 'property,' the optimal regulation gets much more complicated.
- legulere 10y ago
  It is one kind of regulation, but it is usually not enough regulation and sometimes also the wrong regulation (think about public roads, the right to cross the high seas freely, ...)
stale2002 10y ago
Tragedy of the commons is fundamentally different. This paradox would be like if adding more fish to a pond, caused there to be less fish in the pond.
- tunesmith 10y ago
  One individual catching one more fish from a pond since there is fish in the pond would lead there to be less fish in the pond for the individual over time. One individual choosing to simply not catch the one more fish (choosing to not drive the additional road) would make no difference because other people would take the fish/road. Regulating overfishing (removing the road) leads to more fish for every individual over time (leads to better traffic times for everyone).
  - jon_richards 10y ago
    I don't like the fishing to driving analogy. It's easy to see that regulation can lead to more total fish extracted from the ocean, but I'm having a hard time imagining an instance of this paradox for driving that isn't a consequence of fewer overall divers (or weird effects at intersections).
    - stale2002 10y ago
      Exactly, this paradox is basically nonsense. There isn't any situations where this would happen, beyond some made-up math extreme edge cases.
      - jon_richards 10y ago
        I can see it happening quite easily in the real world if you do something like close a little shortcut that gets back on the main road via a light that only ever changes when it detects a car on the shortcut, but that's an intersection effect, which I don't think the paradox is focusing on.
      - deleted 10y ago
        [deleted]
edanm 10y ago
"I don't think it's appreciated enough that some forms of regulation actually do make things better for everyone, and that acting only in one's own self-interest can lead to results that are provably worse for your own self-interest." As someone who is libertarian-ish, I find that a funny thing to say which doesn't jive with reality. Western countries usually have huge governments with huge amounts of regulation, and the default assumption of almost everyone around me seems to be that regulation is the way to deal with almost anything we don't like. So saying that it's not appreciated that some regulation makes things better for everyone sounds to me like saying "it's not appreciated enough that clothes make us warm". (Unless, of course, you're referring only to specific circles, e.g. libertarian economists).
- marklgr 10y ago
  > the default assumption of almost everyone around me seems to be that regulation is the way to deal with almost anything we don't like. Well, in my experience, people are very polarized about this: either they want to go to the gulch, or they want a very protective state that deals with everything. Both population seems comparable, number-wise; YMMV.
  - philipov 10y ago
    I think this is an illusion. The way upvoting/clickbait works primarily rewards extreme opinions, so the moderates are quitting the discussion.
    - marklgr 10y ago
      True, but I was including real life discussions, with friends, colleagues etc.
      - jerf 10y ago
        Then you have a very skewed sample set. Empirically, libertarians rate in the single-digit percentages of the population. People who conform to the libertarian stereotypes probably even less so; I'm "libertarian" because I would tend to think we're overregulated right now rather than underregulated, but it doesn't mean that I want to indiscriminately slice everything away, nor that I am permanently predisposed to slicing everything away no matter how much we might somehow slice. I'd get off that ride sooner than a lot of other "libertarians". Personally I can't help but reading anyone trying to blame underregulation on libertarians as effectively an admission that they have run out of excuses. There just aren't enough libertarians to have that much of an effect on anything. Even "deregulation" is not generally the libertarians running wild, it's non-libertarians trying to implement a "free market", for some definition of said, but they're generally not libertarians and the same people will happily vote for crony capitalism or a ton of other sorts of regulations.
philh 10y ago
> acting only in one's own self-interest can lead to results that are provably worse for your own self-interest. To be precise: everyone acting in their own self interest can be worse for everyone's self-interest, than everyone not doing that. For an individual, acting in your own self-interest is still good for your self-interest, tautologically. Fundamentally, the problem is that people can take resources for themselves, in a way that damages the total resource pool. Each fish you take is one that can't make more fish. Every car on a road slows down all the other cars.
- coldtea 10y ago
  >To be precise: everyone acting in their own self interest can be worse for everyone's self-interest, than everyone not doing that. For an individual, acting in your own self-interest is still good for your self-interest, tautologically. No, the tautology would be "acting in your own self-interest is still acting for your self-interest". No guarantee that the outcome would be the best for you -- unless you have unlimited information of future possibilities to pick what's best (then it would a tautology again). For a trivial counter example let's imagine that after your and others actions, a benevolent benefactor gives $10 million dollars to the ones who self-sacrificed the most. Nature can be such a factor -- only much less benevolent.
  - philh 10y ago
    Okay, fair enough, but nothing like that is happening here. That situation requires a surprise, it needs something to happen that the actors didn't expect. Maybe because they didn't have perfect information, or because they didn't think hard enough about what they knew, or because the dice came up snake eyes, or whatever. The Braess paradox and overfishing are problems even when everyone has perfect information.
- tunesmith 10y ago
  Yes - there are actions that only make sense collectively, or at least "collectively enough". Which explains why someone may be in favor of tax increases even while taking advantage of deductions, or in favor of campaign finance reform while also taking corporate contributions - "you can't unilaterally disarm". My point was more to make a distinction against the argument that regulation against a self-interested sort by definition means a worse outcome for that person. Sometimes a regulation leads to a better personal outcome than you'd get through Nash.

peller 10y ago

I fully agree with your point, but especially for the specific example you've raised, I think there are some very difficult complications that arise from the (lack of an effective) current global governance model. For instance, regulations are mostly only effective if they're enforceable. With fishing taking place largely in international waters, and as I understand it, enforcement falling upon the coast-guard-equivalent of whichever country's flag the boat is flying, enforcement would be very difficult. As far as implementing better regulations, any single nation implementing the good regulations would effectively be putting their own industry at an economic disadvantage (and by extension, their citizens who must pay for the more limited supply) compared to the more lax nations. We see this with the global climate change debate too; basically every single nation needs to agree at the same time for global progress to be made. Edit: clarified the first sentence.

mikeash 10y ago
There isn't much of a global governance model currently. The United Nations does a bit, but for the most part it's just anarchy between nations. Thus, it's really hard to get them to cooperate when the incentives push them to defect.
- peller 10y ago
  Agreed. The other route which seems popular are the "free trade" agreements, but so long as it's corporations writing them, as far as I can tell such deals are moving in the opposite direction of what would be best for the environment and the vast majority of citizens of the world.

WildUtah 10y ago

some forms of regulation actually do make things better for everyone Best example is that property rights are such a form of regulation. When it comes to fisheries, wildlife, open public lands, air pollution, and intellectual 'property,' the optimal regulation gets much more complicated.

legulere 10y ago
It is one kind of regulation, but it is usually not enough regulation and sometimes also the wrong regulation (think about public roads, the right to cross the high seas freely, ...)

stale2002 10y ago

Tragedy of the commons is fundamentally different. This paradox would be like if adding more fish to a pond, caused there to be less fish in the pond.

tunesmith 10y ago
One individual catching one more fish from a pond since there is fish in the pond would lead there to be less fish in the pond for the individual over time. One individual choosing to simply not catch the one more fish (choosing to not drive the additional road) would make no difference because other people would take the fish/road. Regulating overfishing (removing the road) leads to more fish for every individual over time (leads to better traffic times for everyone).
- jon_richards 10y ago
  I don't like the fishing to driving analogy. It's easy to see that regulation can lead to more total fish extracted from the ocean, but I'm having a hard time imagining an instance of this paradox for driving that isn't a consequence of fewer overall divers (or weird effects at intersections).
  - stale2002 10y ago
    Exactly, this paradox is basically nonsense. There isn't any situations where this would happen, beyond some made-up math extreme edge cases.
    - jon_richards 10y ago
      I can see it happening quite easily in the real world if you do something like close a little shortcut that gets back on the main road via a light that only ever changes when it detects a car on the shortcut, but that's an intersection effect, which I don't think the paradox is focusing on.
    - deleted 10y ago
      [deleted]

edanm 10y ago

"I don't think it's appreciated enough that some forms of regulation actually do make things better for everyone, and that acting only in one's own self-interest can lead to results that are provably worse for your own self-interest." As someone who is libertarian-ish, I find that a funny thing to say which doesn't jive with reality. Western countries usually have huge governments with huge amounts of regulation, and the default assumption of almost everyone around me seems to be that regulation is the way to deal with almost anything we don't like. So saying that it's not appreciated that some regulation makes things better for everyone sounds to me like saying "it's not appreciated enough that clothes make us warm". (Unless, of course, you're referring only to specific circles, e.g. libertarian economists).

marklgr 10y ago
> the default assumption of almost everyone around me seems to be that regulation is the way to deal with almost anything we don't like. Well, in my experience, people are very polarized about this: either they want to go to the gulch, or they want a very protective state that deals with everything. Both population seems comparable, number-wise; YMMV.
- philipov 10y ago
  I think this is an illusion. The way upvoting/clickbait works primarily rewards extreme opinions, so the moderates are quitting the discussion.
  - marklgr 10y ago
    True, but I was including real life discussions, with friends, colleagues etc.
    - jerf 10y ago
      Then you have a very skewed sample set. Empirically, libertarians rate in the single-digit percentages of the population. People who conform to the libertarian stereotypes probably even less so; I'm "libertarian" because I would tend to think we're overregulated right now rather than underregulated, but it doesn't mean that I want to indiscriminately slice everything away, nor that I am permanently predisposed to slicing everything away no matter how much we might somehow slice. I'd get off that ride sooner than a lot of other "libertarians". Personally I can't help but reading anyone trying to blame underregulation on libertarians as effectively an admission that they have run out of excuses. There just aren't enough libertarians to have that much of an effect on anything. Even "deregulation" is not generally the libertarians running wild, it's non-libertarians trying to implement a "free market", for some definition of said, but they're generally not libertarians and the same people will happily vote for crony capitalism or a ton of other sorts of regulations.

philh 10y ago

> acting only in one's own self-interest can lead to results that are provably worse for your own self-interest. To be precise: everyone acting in their own self interest can be worse for everyone's self-interest, than everyone not doing that. For an individual, acting in your own self-interest is still good for your self-interest, tautologically. Fundamentally, the problem is that people can take resources for themselves, in a way that damages the total resource pool. Each fish you take is one that can't make more fish. Every car on a road slows down all the other cars.

coldtea 10y ago
>To be precise: everyone acting in their own self interest can be worse for everyone's self-interest, than everyone not doing that. For an individual, acting in your own self-interest is still good for your self-interest, tautologically. No, the tautology would be "acting in your own self-interest is still acting for your self-interest". No guarantee that the outcome would be the best for you -- unless you have unlimited information of future possibilities to pick what's best (then it would a tautology again). For a trivial counter example let's imagine that after your and others actions, a benevolent benefactor gives $10 million dollars to the ones who self-sacrificed the most. Nature can be such a factor -- only much less benevolent.
- philh 10y ago
  Okay, fair enough, but nothing like that is happening here. That situation requires a surprise, it needs something to happen that the actors didn't expect. Maybe because they didn't have perfect information, or because they didn't think hard enough about what they knew, or because the dice came up snake eyes, or whatever. The Braess paradox and overfishing are problems even when everyone has perfect information.
tunesmith 10y ago
Yes - there are actions that only make sense collectively, or at least "collectively enough". Which explains why someone may be in favor of tax increases even while taking advantage of deductions, or in favor of campaign finance reform while also taking corporate contributions - "you can't unilaterally disarm". My point was more to make a distinction against the argument that regulation against a self-interested sort by definition means a worse outcome for that person. Sometimes a regulation leads to a better personal outcome than you'd get through Nash.