The El Farol problem
Simplifying Complexity
00:00
The Elphurro Problem
I wrote up this Elphurro problem in 1994, brought it out in the American economic review. And there was a massive silence. Nobody knew what to make of that. Every agent's trying to do something within a situation created by other agents. But you don't know how they're going to react. So these different strategies could be Adam Smith's invisible hand. That's how economics works. A bit like increasing returns.
Transcript
Play full episode
