The El Farol bar problem is a game theory problem based on a bar that actually exists in Santa Fe. A finite population of hypothetical people want to go to the El Farol bar on a Thursday night. If more than 60 percent of them go to the bar, it will be too crowded and everyone will have a worse time than if they’d stayed home, but if fewer than 60 percent go, all who show up will have a great time. Everyone must decide whether to go at the same time, and then they learn whether they made the right decision or not. The point of the El Farol bar problem is to illustrate an aspect of collective decision-making—not to offer a practical solution to the issue of crowded restaurants—but the thought experiment’s contrast with how shortages and surpluses are resolved in real life is the reason I think about it a lot. The El Farol bar problem exemplifies a mismatch between supply and demand (for space, in this case) and much of life is organized around trying to prevent those situations from happening. The El Farol bar is a place, and physical places are where people’s ability to properly sort themselves are perhaps the least sophisticated—a point that the El Farol bar problem unintentionally makes.
#97: The Coroner at Dreamgate Frontier
#97: The Coroner at Dreamgate Frontier
#97: The Coroner at Dreamgate Frontier
The El Farol bar problem is a game theory problem based on a bar that actually exists in Santa Fe. A finite population of hypothetical people want to go to the El Farol bar on a Thursday night. If more than 60 percent of them go to the bar, it will be too crowded and everyone will have a worse time than if they’d stayed home, but if fewer than 60 percent go, all who show up will have a great time. Everyone must decide whether to go at the same time, and then they learn whether they made the right decision or not. The point of the El Farol bar problem is to illustrate an aspect of collective decision-making—not to offer a practical solution to the issue of crowded restaurants—but the thought experiment’s contrast with how shortages and surpluses are resolved in real life is the reason I think about it a lot. The El Farol bar problem exemplifies a mismatch between supply and demand (for space, in this case) and much of life is organized around trying to prevent those situations from happening. The El Farol bar is a place, and physical places are where people’s ability to properly sort themselves are perhaps the least sophisticated—a point that the El Farol bar problem unintentionally makes.