In game theory, the "price of anarchy" describes how individuals acting in their self-interest within a larger system tend to reduce that larger system's efficiency. It is a ubiquitous phenomenon, one that almost all of us confront on a regular basis.

For example, if you are a city planner in charge of traffic management, there are two ways you can address traffic flows. Generally, a centralised, top-down approach – one that comprehends the entire system, identifies choke points and makes changes to eliminate them – will be more efficient than simply letting individual drivers make their own choices on the road, with the assumption that these choices will lead to an acceptable outcome. The first approach reduces the cost of anarchy and makes better use of all available information.

The world is awash in data. Last year, we produced as much data as was created in all previous years of human civilisation. We are quickly approaching what Italian writer Italo Calvino presciently called the "memory of the world": a full digital copy of our physical universe.

As the Internet expands into new realms of physical space through the Internet of Things, the price of anarchy will become a crucial metric, and the temptation to eliminate it with the power of big data analytics will grow stronger.