coordination problem

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A situation in which the interests of agents coincide, and the aim is to try to reach an outcome in which those interests are satisfied. Informally, this is a situation in which each person has an interest in doing something that chimes in with what the others do. For example, we may each have an interest in meeting at dinner time, but face the problem that neither of us is sure in which part of the town the other will be. Going to the only restaurant, expecting the other to reason that this is the salient thing to do and to go there likewise, would be a solution to the problem. The problem would not be so easy if there were several restaurants, or if an element of competition entered, whereby my interests are better served by one choice (e.g. a restaurant near me) and yours by a different choice (one near you). More formally, a solution requires finding an equilibrium, meaning that no agent can do better by unilaterally doing something else given the choices of the others. A proper equilibrium is one which each agent likes better than any other equilibrium. Much social action, including perhaps inventing language and society, requires solving co-ordination problems. See also convention, game theory, Nash equilibrium, prisoners' dilemma.

Subjects: Philosophy.

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