Efficiency and Equity in Collective Systems of Interacting Heterogeneous Agents

Summary

In this chapter we address the issue realizing efficient and equitable utilization of limited resources by collective decision of interacting heterogeneous agents. There is no presumption that collective action of interacting agents leads to collectively satisfactory results without any central authority. How well agents do in adapting to their environment is not the same thing as how satisfactory an environment they collectively create. Agents normally react to others' decisions, and the resulting volatile collective decision is often far from being efficient. By means of experiments, we show that the overall performance of the system depends on the types of interaction and the heterogeneity of preferences. We also show that the most crucial factor that considerably improves the performance is the way of information presentation to agents. It is shown that if each agent adapts to global information the performances are poor. The optimal guidance strategy to improve both efficiency and equity depends on the way of interaction. With symmetric interaction, the local information of the same type realizes the highest performance. With asymmetric interaction, however, the local information of the opposite preference type realizes the highest performance.