What does that mean? Say the example of Airbus and Boeing. Airbus wants to produce and Boeing has little incentive to. But as a airlines company (e.g. British Airways), I know I need a bigger plan to fulfil the demands. That is my outcome: for the superjumbo jet to be produced.
Through game theory analysis, I can see that the probability of superjumbo jets happening is quite slim.
What can I do?
Some mechanisms to change the behaviours and outcomes:
Maybe I can pre-order 100 superjumbo jets from Airbus and Boeing, so they know they have a confirmed demand for it
Lobby the UK government to increase subsidies for the R&D part, so both parties have less losses/risks. Maybe that might entice them to develop
Look for a new competitor that produces plans and ask them to work with Airbus
Those are just basic simple (& maybe crazy, not-practical) ideas. But you get what I mean. I can introduce mechanisms to change the behaviours and outcomes, so it suits an objective.
What’s the link with token ecosystems?
Similarly, we want to analyse the outcomes and build in some mechanisms and rules to ensure that the outcomes are in line with the objectives.
Remember I mentioned that every ecosystem has 1 main objective? The truth is, that can be challenging to achieve sometimes, when you have a decentralised ecosystem and everyone behaves differently.
However, you can change that through rules.
I want my ecosystem to have honest miners. So I can make the hardware expensive and difficult to get, to reduce cheats from entering the game.
We can do that through incentives (rewards) or disincentives (punishments). These act as the mechanisms and rules to ensure that the outcomes are in line with the objective of the ecosystem.
What rules and mechanisms?
There are many, but to make it easy, let’s call it governance. Governance, in my opinion, is the most important aspect in the token ecosystem.
There are many types of governance:
How can we get the true value of the participants so we can allocate the goods efficiently? (e.g. there are 2 transactions waiting to be validated. What mechanism or governance can I have in place, to prioritise which transaction to approve first?)
How can I ensure that my rules induce a game among strategic agents in order to realise a system-wide objective or social choice function, in an equilibrium of the game? (e.g. how can I reduce instances of pump-and-dump, since this is not an objective of my ecosystem?)
We are just scratching the surface of game theory and its application to token economics. At the end of the day, it forms part of the design model for the ecosystem to exist.