Coordination_game | TriviaQuestions.online

⭐ In the context of focal points (game theory), coordination games are considered successful when participants…

Focal points function as a means to achieve coordination in the absence of direct communication, allowing players to anticipate each other's choices and avoid outcomes where no one coordinates successfully.

⭐ Core Definition: Coordination game

A coordination game is a type of simultaneous game found in game theory. It describes the situation where a player will earn a higher payoff when they select the same course of action as another player. The game is not one of pure conflict, which results in multiple pure strategy Nash equilibria in which players choose matching strategies. Figure 1 shows a 2-player example.

Both (Up, Left) and (Down, Right) are Nash equilibria. If the players expect (Up, Left) to be played, then player 1 thinks their payoff would fall from 2 to 1 if they deviated to Down, and player 2 thinks their payoff would fall from 4 to 3 if they chose Right. If the players expect (Down, Right), player 1 thinks their payoff would fall from 2 to 1 if they deviated to Up, and player 2 thinks their payoff would fall from 4 to 3 if they chose Left. A player's optimal move depends on what they expect the other player to do, and they both do better if they coordinate than if they played an off-equilibrium combination of actions. This setup can be extended to more than two strategies or two players.

↓ Menu

👉 Coordination game in the context of Focal point (game theory)

In game theory, a focal point (or Schelling point) is a solution that people tend to choose by default in the absence of communication in order to avoid coordination failure. The concept was introduced by the American economist Thomas Schelling in his book The Strategy of Conflict (1960). Schelling states that "[p]eople can often concert their intentions or expectations with others if each knows that the other is trying to do the same" in a cooperative situation (p. 57), so their action would converge on a focal point which has some kind of prominence compared with the environment. However, the conspicuousness of the focal point depends on time, place and people themselves. It may not be a definite solution.

↓ Explore More Topics