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See also: http://en.wikipedia.org/wiki/Price_of_anarchy http://en.wikipedia.org/wiki/Price_of_anarchy. A way of analyzing the difference between the "optimal" o
by bo1024 14y ago
See also: http://en.wikipedia.org/wiki/Price_of_anarchy http://en.wikipedia.org/wiki/Price_of_anarchy. A way of analyzing the difference between the "optimal" outcome and the "rational" one. Common in the computer science literature, slowly infiltrating the economics literature I think.
- bcoates 14y agoI think economics got there first; that looks like http://en.wikipedia.org/wiki/The_Nature_of_the_Firm http://en.wikipedia.org/wiki/The_Nature_of_the_Firm : companies form, even in an efficient market, because they can potentially globally optimize groups of individuals into more efficient interactions than the individuals themselves could in any market. The other side of it is that such optimization doesn't scale and a sufficiently large firm will be unable to find practical solution at all.
- bo1024 14y agoCool, seems interesting and related, but also very different and more specific. The point of price of anarchy is to take any game and quantify the "loss" due to selfishness or lack of cooperation.