Coordination Failure and Congestion in Information Networks

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 coordination 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.