Allen Rice
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Allen Rice has not written any posts yet.
Allen Rice has not written any posts yet.
"It’s hard to beat signaling equilibria—because they’re “multi-factor markets”—which are special cases of coordination problems that create “inferior Nash equilibria”—which are so stuck in place that market controllers can seek rent on the value generated by captive participants."
It's things like this that makes me puzzled why the author is yet libertarian, even in spite of this perfectly succint description of the Awful state of affairs arrived at in the wild west, when a Leviathan could try to transcend/straddle these fruits/niches and force them upward into a more Pareto optimal condition, maybe even into the non-Nash E. states if we're extra lucky. Or is Regulatory Capture and the Law of Unintended Consequences... (read more)
"I'm not aware of a standard term for this situation, so I'll call it an inferior equilibrium"
Lock In! I think what you're describing is called Lock In. Classic example being the qwerty keyboard. Or not using the metric system yet. Path-dependence of arriving at a particular convention, where other better alternatives exist and are known and available, but there are costs of switching.
Spooky-Inadequacy-at-a-Distance ?
All these depictions about multi-tiered stages through which action & incentives have to pass - like venture capital going thru multiple rounds A -> B -> C, or the recursion of "it's more than just what you think, but also what you think others think", and "what will the journalists say about what the politicians say outside the overton window" etc. seem to me to have a similar theme underlying them all, that 'the further distance you are away, the more screwed up and misaligned the effects are', and the more we're locked-in to weird states of inadequate equilibria. And this reminds me of an analogy in Physics. (And I HOPE... (read more)