Here’s an interesting general way in which a group of people can start burning all kinds of utility. Combine:
1. People who are incompetent in some socially useful skill, but whose incompetence is costly for others to determine;
2. A fairly high base rate of #1; and
3. Rational reactions from others.
First, consider (heteronormative, for simplicity) dating. Imagine a world in which there are many more single Gender-As than Gender-Bs, but many of the gAs have serious social skills problems that are costly for gBs to discover but drastically reduce their dating value.
If single gBs in general act like Bayesians, sooner or later after enough bad experiences with no-social-skills gAs, they’ll update their prior on any arbitrary gA’s social skills. Acting rationally, they’ll reject approaches from far more gAs than they would reject otherwise, to economize on the costs of being subjected to poor social skills. Only those gAs who can display a costly signal of good social skills right up-front will succeed. The consequence is that both the gBs and the medium-social-skills gAs (who are datable, but not awesome enough to be able to display costly signals) lose out on opportunities.
Now consider bad drivers. On the road, we take a lot of cues from one another’s behavior — ordinarily, for example, if people slow down or stop, there’s a reason for it, and we can make inferences about those reasons from the behavior. But this information mechanism breaks when there are a lot of incompetent drivers on the road.
So suppose Joey, a competent driver, is in a community with a lot of timid drivers. Ordinarily, if someone in front of Joey stops for no visible reason, s/he’ll infer that there’s some good reason to stop, like a hard-to-see pedestrian crossing the street. But eventually, after observing all kinds of drivers (many in priuses or volvos) stopping for no reason except misfiring synapses in their brains, Joey’s going to update his/her priors and expect that, ordinarily, stopping in this community just means the person in front is incompetent. So Joey, acting rationally and optimizing on his/her time, will swerve around the stopped car. The loss here falls on the pedestrian who is actually there .001% of the time.
How to deal with this general kind of problem? In the abstract, the best way I can see is to encourage the proliferation of reliable signals of competence and incompetence. Perhaps, for example, timid drivers ought to be identified and made to wear special tags on their cars… obviously not a serious suggestion (if only because sometimes even the timid drivers stop for an actual pedestrian, and the tags would mean all such pedestrians get run over), but something like that…
(Third example: job markets where applicants have private information about their own deficiencies…)