Jamal Awil

← The Strategy of Conflict

Coordination-based agreements become self-enforcing through interdependent expectations. [causal]

There are, however, particular game situations that lend themselves to enforcible agreement. One is an agreement that depends on some kind of coordination or complementarity. If two people have disagreed on where to meet for dinner; if two criminal accomplices have disagreed on what joint alibi to give; or if members of a business firm or football team have disputed about what prices they will quote or what tactic they will follow, they nevertheless have an overriding interest in the ultimate consistency of their actions. Once agreement is formally reached, it constitutes the only possible focal point for the necessary subsequent tacit collaboration; no one has a unilateral preference now to do anything but what he is expected to do. In the absence of any other means of enforcement, then, parties might be well advised to try to find agreements that enjoy this property of interdependent expectations, even to the extent of importing into their agreement certain elements whose sole purpose is to create severe jeopardy for non-coordination. Tearing the treasure map in half or letting one partner carry the gun and the other the ammunition is a familiar example.

QUESTION: How do these self-enforcing coordination agreements relate to Schelling's broader theory of focal points and tacit bargaining?

Thomas C. Schelling, The Strategy of Conflict, loc. 312