Despite the fact that individuals in the economy act only to advance their own self-interests, the aggregate effect is a highly productive society. Individuals are in the best position to understand their needs and the means to satisfy them. Thus, individuals reap the direct benefits of their own good decisions and suffer the direct consequences of their bad ones. They cooperate with other members of the society to achieve an outcome greater than that possible by each member alone. At times they compete with other members to provide goods or services at the lowest possible cost, thus eliminating waste and inefficiency.
Market economies combine the best of both approaches.
They are robust and nimble, like distributed approaches, yet allow for some centralization for optimization, when the time and computational resources permit. For example, consider a team of robots assembled to perform a particular task. A software agent, representing the user, negotiates with the team to perform the task. The user desires the team to perform the task well while minimizing costs. He defines a function, trev, that maps possible task outcomes onto revenue values, and another function, tcost, that maps possible schemes for performing the task onto cost values.