Coordination Failure and Congestion in Information Networks

Abstract

Coordination failure, or agents ’ uncertainty about the action of other agents, may be an important source of congestion in large decentralized systems. The El Far01 or Santa Fe bar problem provides a simple paradigm for congestion and coordina-tion problems that may arise with over utilization of the Internet. This paper recasts the problem in a stochastic framework and derives a simple adaptive strategy that has intriguing optimization properties; a large collection of decentralized de& sion makers, each acting in their own best interests and with limited knowledge, converge to a solution that (optimally) solves a complex congestion and social coordination problem. A variation in which agents are allowed access to full information is not nearly as successful.