Robert Frank coined the term “Darwin’s Wedge” to describe situations where individual incentives diverge from collective goals (sometimes even risking collective doom). These situations include a class of problems such as the tragedy of the commons, Prisoner’s Dilemma games, and Nash equilibria. In each case, myopic self-maximizing logic leads to bad outcomes.
In today's lesson, Jag Bhalla argues that unfettered mindless competition can rob us of "the point of being human, which is to use reason and foresight to coordinate better outcomes."
Intelligent constraints, Bhalla argues, can work better than what emerges from mindless “natural” competition. And so our choices are now to either let the power of markets be dumb as trees, or to guide their competitions for better outcomes.