"The Price of Anarchy"

The Price of Anarchy measures how much worse the outcome of a self-interested system can be compared to an optimal, coordinated solution. In scenarios like traffic flow or network routing, individuals act to maximize their own benefit, which may lead to inefficiencies, like traffic jams or clogged networks. The Price of Anarchy quantifies this gap, highlighting how individual decision-making without coordination can reduce overall system performance. It helps understand the potential cost of selfish behavior versus a centrally optimized approach, guiding the design of systems to reduce inefficiencies caused by self-interest.