Arbeitspapier
Ignorance is bliss: Rationality, information and equilibrium
An information-theoretic thought experiment is developed to provide a methodology for predicting endowment distributions in the absence of information on agent preferences. The allocation problem is first presented as a stylised knapsack problem. Although this knapsack allocation is intractable, the social planner can nevertheless make precise predictions concerning the endowment distribution by using its information-theoretic structure. By construction these predictions do not rest on the rationality of agents. It is also shown, however, that the knapsack problem is equivalent to a congestion game under weak assumptions, which means that the planner can nevertheless evaluate the optimality of the unobserved allocation.
- Language
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Englisch
- Bibliographic citation
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Series: School of Economics Discussion Papers ; No. 11,03
- Classification
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Wirtschaft
Mathematical Methods
Existence and Stability Conditions of Equilibrium
Exchange and Production Economies
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- Subject
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Information theoretic measure
knapsack problem
congestion game
potential function
- Event
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Geistige Schöpfung
- (who)
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Barde, Sylvain
- Event
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Veröffentlichung
- (who)
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University of Kent, School of Economics
- (where)
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Canterbury
- (when)
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2011
- Handle
- Last update
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20.09.2024, 8:22 AM CEST
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Barde, Sylvain
- University of Kent, School of Economics
Time of origin
- 2011