Response to information

Abstract

The coordinated and efficient distribution of limited resources by individual decisions is a fundamental and unsolved problem. When individuals compete for road capacities, time, space, money, etc., they normally take decisions based on aggregate rather than complete information, such as TV news or stock market indices. The resulting volatile decision dynamics and decision distribution are often far from being optimal. By means of experiments, we have identified ways of information presentation that can considerably improve the overall performance of the system. We also present a stochastic behavioral description allowing us to determine optimal strategies of decision guidance by means of user-specific recommendations. These strategies manage to increase the adaptability to changing returns (payoffs) and to reduce the deviation from the time-dependent user equilibrium, thereby enhancing the average and individual outcomes. Hence, our guidance strategies can increase the performance of all users by reducing overreaction and stabilizing the decision dynamics. Our results are significant for predicting decision behavior, for reaching optimal behavioral distributions by decision support systems, and for information service providers. One of the promising fields of application is traffic optimization. © 2012 Springer-Verlag Berlin Heidelberg.