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📚 Update Incentives documentation with additional insights on mechanism design and resistance to overfitting
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Incentives.md
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Incentives.md
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- Software is eating Mechanism Design. Incentives can be encoded in [[blockchain|blockchains]].
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- The simpler a mechanism is, and the fewer parameters a mechanism has, the less space there is to insert hidden privilege for or against a targeted group. If a mechanism has fifty parameters that interact in complicated ways, then it's likely that for any desired outcome you can find parameters that will achieve that outcome.
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- Fewer knobs makes it more resistance to overfit (to your world view and use case) and corruption.
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- The best engineering designs are those that remove things and make them implicit.
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- Remember to keep fast [[Feedback Loops]] in mind when designing mechanisms.
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- Mechanism design flips game theory: choose rules (outcomes & payments) so strategic agents reach desired outcomes.