This paper shows that signal restoration methodology is appropriate for predicting the equilibrium state of certain economic systems. A formal justification for this is provided by proving the existence of finite improvement paths in object allocation problems under weak assumptions on...

An information-theoretic thought experiment is developed to clarify why the maximum entropy methodology is appropriate for predicting the equilibrium state of economic systems. As a first step, object allocation problems, modeled as knapsack problems, are shown to be equivalent to congestion...