is it possible that Hayek's assumptions about decentralized intelligence no longer hold?
It still holds. It's possible it doesn't hold forever though. I can imagine a centralized decision maker that's smarter than the entirety of the market. You can kind of naively model the decision ability of a system as decision_ability = sum(intelligence of agent(s)) + sum(value of information gathered) - sum(information transaction costs) - sum(information gathering costs).
Parents of small children are an example of this at play. It implies that if individual market participants are extremely dumb or extremely inefficient at information gathering relative to a centralized decision maker, the centralized decision maker will allocate resources better.
I like your equation. I also think there's something hiding in your "value of information gathered" having to do with orthogonality of information that isn't made enough of. Or perhaps, we could just talk about "information" in the Shannon sense, where these redundancies are formalized.
In any event, you can imagine a sensor-rich world where there's simply more, and more useful, info avail to some centralized mega-brains, enough that allows them to outcompete the more numerous multi-agent model.
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Or perhaps, we could just talk about "information" in the Shannon sense, where these redundancies are formalized.
Ah great insight - we could quantify information novelty/scarcity/surprise. I wonder if we could use Shannon to model how fast our infinite aliens would get bored.
In any event, you can imagine a sensor-rich world where there's simply more, and more useful, info avail to some centralized mega-brains, enough that allows them to outcompete the more numerous multi-agent model.
You just wrote the plot to at least half of the next decade's dystopian scifi movies.
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