It seems like temporarily disrupting the equilibrium is probably just equivalent to reducing the confidence of actors’ beliefs about other actor’s incentives. If the hard incentives are permanently changed, that seems like a permanent shift in the equilibrium.
It would be really hard to correctly identify an exact new equilibrium. It feels like we would realistically need to identify the properties we want the new equilibrium to have, identify where those properties are in the space of possible equilibria, and then try to shift the current equilibrium in that direction.
How continuously can equilibria move? I have a vague intuition it is more continuous the more types of actors are participating in it, but is incremental progress actually possible or should we expect that if we don’t move to the target it will ‘snap back’ to the same place it was before? Is there some kind of equilibria density in economics?
How well would we have to understand a prospective equilibrium to tell whether a business idea might be successful?
Following on that, it seems like the faster businesses appear to capitalize on a new equilibrium the more fixed it should be. This suggests to me that maybe a battery of start-ups would be a good approach even without the profit motive. I keep wanting to say mission hedging and activist VC firm.
A few further thoughts/questions:
It seems like temporarily disrupting the equilibrium is probably just equivalent to reducing the confidence of actors’ beliefs about other actor’s incentives. If the hard incentives are permanently changed, that seems like a permanent shift in the equilibrium.
It would be really hard to correctly identify an exact new equilibrium. It feels like we would realistically need to identify the properties we want the new equilibrium to have, identify where those properties are in the space of possible equilibria, and then try to shift the current equilibrium in that direction.
How continuously can equilibria move? I have a vague intuition it is more continuous the more types of actors are participating in it, but is incremental progress actually possible or should we expect that if we don’t move to the target it will ‘snap back’ to the same place it was before? Is there some kind of equilibria density in economics?
How well would we have to understand a prospective equilibrium to tell whether a business idea might be successful?
Following on that, it seems like the faster businesses appear to capitalize on a new equilibrium the more fixed it should be. This suggests to me that maybe a battery of start-ups would be a good approach even without the profit motive. I keep wanting to say mission hedging and activist VC firm.