In economics, fairness is a crucial aspect of any allocation problem. The Nash Social Welfare (NSW) objective is a well-known concept that aims to distribute goods among agents in a way that maximizes the overall satisfaction while ensuring fairness. This survey provides an overview of the NSW objective, its evolution, and applications in various fields.
Evolution of Nash Social Welfare
The NSW objective was first introduced by John C. Harsanyi and Reinhard Selten in 1972 as a solution to a two-person bargaining game with incomplete information. Since then, it has been extensively studied and applied in various contexts, including indivisible items and envy-free allocation. The theory of NSW has also been extended to address issues of fairness, such as proportionality and distributive justice.
Applications of Nash Social Welfare
The NSW objective has been successfully applied in various fields, including economics, political science, and computer science. In economics, it has been used to study bargaining problems, such as auctions and procurement. In political science, it has been employed to analyze voting systems and electoral districts. In computer science, it has been used to design fair algorithms for resource allocation and cake-cutting problems.
Conclusion
In conclusion, the NSW objective is a powerful tool for solving allocation problems in economics and other fields. Its ability to balance fairness and efficiency makes it an essential concept in understanding how goods are distributed among agents. By demystifying complex concepts through engaging analogies and metaphors, this summary aims to provide a comprehensive overview of the NSW objective, its evolution, and applications.
