Pareto Optimality

As engineering systems grow in complexity, it becomes more challenging to achieve system-level designs that effectively balance the trade-offs among subsystems. Lewis and others have developed a well-known, traditional game-theoretic approach for formally modeling complex systems that can locate a Nash equilibrium design with a minimum of information sharing in the form of a point design. This paper builds on Lewis' work by proposing algorithms that are capable of converging to Pareto-optimal system-level designs by increasing cooperation among subsystems through additional passed information. This paper investigates several forms for this additional passed information, including both quadratic and eigen-based formulations. Such forms offer guidance to designers on how they should change parameter values to better suit the overall system by providing information on directionality and curvature. Strategies for representing passed information are examined in three case studies of...

Toplumdaki iktisadi ve politik aktörler rasyonalite çerçevesinde bireysel faydalarını maksimize etmeye çalışırken çoğu zaman toplumsal fayda maksimize olmamaktadır. Pareto tarafından ortaya atılan ve iktisat literatüründe Pareto verimliliği, optimum pareto veya pareto optimumu diye ifade edilen terim toplumdaki üretici, tüketici ve faktör sahiplerinden birinin durumunu kötüleşmeden bir başkasınınkinin iyileştirilmesinin mümkün olmadığını ifade etmektedir. Diğer bir deyişle toplumdaki bireylerden en az birinin refahı azaltılmadan diğer bireylerin refahının artırılmasının imkansız olduğunu ve bu seviyenin ise “refah optimum” seviyesi olduğu anlatılmaktadır. Ancak, bu verimlilik her zaman toplumsal açıdan istenilen sonuçları vermez. Uygulaması zor olmasına rağmen, Pareto optimumu siyasette, politik iktisatta, siyasi partilerin ve hükümetlerin programlarında dikkate alınmalıdır. Siyasi partilerin ekonomik, sosyal, politik, kültürel ve diğer alanlarda öncelikleri farklı olsa da “vatandaşın yaşam kalitesinin yükseltilmesi” her siyasi partinin ortak ve birincil amacı olmalıdır. Bu çerçevede, Keynes’den Piketty’e liberallerin büyük bir politika ikilemi göze çarpmaktadır.

In the framework of finite games in extensive form with perfect information and strict preferences, this paper introduces a new equilibrium concept: the Perfect Prediction Equilibrium (PPE). In the Nash paradigm, rational players consider that the opponent's strategy is fixed while maximizing their payoff. The PPE, on the other hand, models the behavior of agents with an alternate form of rationality that involves a Stackelberg competition with the past. Agents with this form of rationality integrate in their reasoning that they have such accurate logical and predictive skills, that the world is fully transparent: all players share the same knowledge and know as much as an omniscient external observer. In particular, there is common knowledge of the solution of the game including the reached outcome and the thought process leading to it. The PPE is stable given each player's knowledge of its actual outcome and uses no assumptions at unreached nodes. This paper gives the general definition and construction of the PPE as a fixpoint problem, proves its existence, uniqueness and Pareto optimality, and presents two algorithms to compute it. Finally, the PPE is put in perspective with existing literature (Newcomb's Problem, Superrationality, Nash Equilibrium , Subgame Perfect Equilibrium, Backward Induction Paradox, Forward Induction).