Decentralized choice without global coordination yields suboptimal group outcomes

Evidence

As in the real world, these simulations do not involve an omniscient being who has complete knowledge of the environmental space and can assign group memberships in a way that ensures an optimal group size. Instead, individual agents make choices based on the choices of other agents, and the result can sometimes be less than desired, as was the case in the simulations presented here. — Roderick M. Kramer, Geoffrey J. Leonardelli, Robert W. Livingston, Social Cognition, Social Identity, and…, 842

Categorization

• XREF: Connects to Hayek’s knowledge problem and distributed decision-making limits — micro-local rationality aggregating into macro-suboptimality.