Coordination Game
What is Coordination Game?
A coordination game is one where players do best by making the same choice, so it has two or more Nash equilibria and the problem is agreeing on one.
Interests here are mostly aligned: both players want to match, and mismatching hurts them both. That produces several Nash equilibria instead of one, which makes the question not what is best but which outcome the players will settle on. Because any of them is stable once expectations point that way, conventions, past practice, and focal points do the real work; drivers keeping to one side of the road is the everyday case. Some coordination games have equilibria that are not equally good, so a group can be stuck in a worse one that nobody can escape alone. That is the difference from a prisoner's dilemma, where there is a single equilibrium and it is bad because the players' incentives genuinely conflict.
Coordination Game: a worked example
Two carmakers, Volt and Ampere, each choose charging plug A or plug B, with profits written (Volt, Ampere). Matching on A gives (6, 4), matching on B gives (3, 3), and any mismatch gives (0, 0) because no charging network reaches scale. Both matching cells are Nash equilibria: at (6, 4) either firm switching alone falls to 0, and at (3, 3) the same is true. So plug B survives as an equilibrium even though both firms would rather be on plug A, since neither gains by moving away on its own. Whichever plug the industry happens to settle on first tends to stay.
The mistake students make with coordination game
Many students find one Nash equilibrium and stop, because they assume every game has exactly one. Coordination games have at least two, and checking every cell is the only way to catch them. The other error is assuming players will land on the equilibrium that pays more; nothing in the model guarantees that, since the worse matching outcome is just as stable once both sides expect it.
Coordination Game questions
How is a coordination game different from a prisoner's dilemma?
A coordination game has several equilibria and the difficulty is choosing between them, while a prisoner's dilemma has one equilibrium that both players wish they could escape. Interests line up in a coordination game and clash in a dilemma. Talking it over can solve a coordination problem, but it does not fix a dilemma, because nothing stops either side from breaking the promise.
What is a focal point?
A focal point is an option that stands out enough for players to expect each other to choose it without communicating. Thomas Schelling gave the example of strangers who must meet in a city with no way to talk and who converge on an obvious landmark. Focal points explain how coordination games get solved in practice, since the payoffs alone do not pick a winner.
Can a coordination game get stuck in the worse outcome?
Yes, a coordination game can settle on an equilibrium that pays everyone less, and no single player can fix it by switching. Moving alone means mismatching, which is worse still, so the group needs simultaneous change or an outside push such as an agreed standard. This is why a technical standard can survive long after something better exists.
Related terms
Common comparisons
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