Last Updated on 28. April 2023 by Martin Schuster

In this lesson, we take a look at two performance indicators that describe how well certain mechanisms fares compared to a central authority. These two indicators are:

• Price of anarchy (PoA)
• Price of stability (PoS)

Both were introduced to measure the efficiency of networks but were adopted for all kinds of games. Both indicators state the ratio between the optimal outcome and the (worst or best) equilibrium outcome.