Regarding both perfect knowledge and equilibrium discovery, consider Hayek’s work on what he called the knowledge problem, beginning with “The Use of Knowledge in Society.” No person or entity possesses perfect knowledge of the current state, and no one has perfect knowledge of the follow-on simple or higher-order effects. Instead, apply the insight from public choice theory that state actors make self-interested choices. Cui bono?
I am far from denying that in our system equilibrium analysis has a useful function to perform. But when it comes to the point where it misleads some of our leading thinkers into believing that the situation which it describes has direct relevance to the solution of practical problems, it is time that we remember that it does not deal with the social process at all and that it is no more than a useful preliminary to the study of the main problem.
instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge.
(In the same spirit, I'm trying to move beyond dissfests towards more collaborative convos on HN)
@warden I was encouraged to see "perfect knowledge" replaced by "sufficient knowledge" in at least once instance in your post.
We should encourage Glen & Michael to work on seeing if weakening their assumptions as above would produce proofs of more useful natures, as a prelim to solving the knowledge problem :)
(Alas collabs take work, & HN is primarily an entertainment & venting channel, due to its ephemeral design)
Comments
Regarding both perfect knowledge and equilibrium discovery, consider Hayek’s work on what he called the knowledge problem, beginning with “The Use of Knowledge in Society.” No person or entity possesses perfect knowledge of the current state, and no one has perfect knowledge of the follow-on simple or higher-order effects. Instead, apply the insight from public choice theory that state actors make self-interested choices. Cui bono?
I am far from denying that in our system equilibrium analysis has a useful function to perform. But when it comes to the point where it misleads some of our leading thinkers into believing that the situation which it describes has direct relevance to the solution of practical problems, it is time that we remember that it does not deal with the social process at all and that it is no more than a useful preliminary to the study of the main problem.
https://www.kysq.org/docs/Hayek_45.pdf
great quote
May I quote the same Hayek (last page):
(In the same spirit, I'm trying to move beyond dissfests towards more collaborative convos on HN)
@warden I was encouraged to see "perfect knowledge" replaced by "sufficient knowledge" in at least once instance in your post.
We should encourage Glen & Michael to work on seeing if weakening their assumptions as above would produce proofs of more useful natures, as a prelim to solving the knowledge problem :)
(Alas collabs take work, & HN is primarily an entertainment & venting channel, due to its ephemeral design)