Questions: Coordination Games and Multiple Equilibria

Question 1

How does a coordination game differ from a prisoner's dilemma, and why does this distinction matter for explaining international cooperation?

Model answer: In a prisoner's dilemma, each player has a dominant incentive to defect, making cooperation hard to sustain without external enforcement. In a coordination game, players want to coordinate but face multiple equilibria — once coordination is achieved, it is self-enforcing. This matters because it explains why some forms of international cooperation (driving conventions, treaty formats, reserve currencies) are stable without enforcement mechanisms.

The prisoner's dilemma logic dominates IR theory but cannot explain self-enforcing conventions. Coordination game theory fills this gap by explaining why some norms persist without punishment mechanisms and why path dependence matters: whichever equilibrium was established historically tends to persist because deviating unilaterally is costly.

Question 2

What is a 'focal point' (Schelling point), and why does it help explain which equilibrium actors select when multiple Nash equilibria exist?

Model answer: A focal point is an equilibrium that stands out as culturally or contextually salient, making it the natural 'landing point' for actors who cannot communicate directly. It is not mathematically privileged but socially privileged — actors converge on it because they expect others to converge on it.

Schelling's insight was that rationality alone cannot select among multiple equilibria — actors need some shared basis for expectation. Focal points are that basis: they emerge from history, convention, salience, or precedent. This is why institutions matter even when they have no enforcement power: they create the shared expectation that anchors coordination.