Coordination failure (political science)

A coordination failure occurs when the members of a group can not reach a viable preferable one in itself result for the group. The participants do not cooperate, although it would pay in total for all. This can occur from small group up to the whole society.

Causes

Public Goods

Due to their properties non-rivalry and non-exclusivity public goods have no price or it can be assigned to the individual no price for the good ( no individual opportunity costs). For these goods, there is no market and they can be exploited without having to pay for it. It must not be eligible for incurred costs yet to be enforced a reward for past accomplishments (external effects).

The caused by the pricing utility maximization does not take place because the uniform coordination Medium Price is not available. Thus, it comes with the choice of action to a deviation between the individual objectives of the individual and the collective goal of the group.

History

A variety of developments has been able to prevail only on the basis of historically conditioned circumstances (example: QWERTY layout on keyboards). Over time, this reason has been eliminated and much better, partly superior, developments have arisen. A high level of diffusion and acceptance of the inferior convention has become a standard. The group denied the Convention Collective change to take place, although it would be the most advantageous result for the group. Each of the two conventions provides a balance for themselves dar.

As long as all follow the same ( unfavorable ) agreement, it is connected to individuals with an extra effort to learn the new technology or use. Therefore, the standard is maintained jointly or receive ( lock-in effect). To break such a pattern, measures to attain a critical mass to give up the old standards are needed to move. Thus, the additional effort of the individual for the new technology / process becomes less important and the new convention can be fully developed on the basis of their technical favorability

Stepping into action

If in a group, the actions carried out in stages, there is a danger that the short-term advantage of profit by individuals covered the view of the overall result. Since the preferences can shift for each new action, can mean a number of choices for the majority of group members each have a small gain. Contrast, is a summed negative result for the group, as the impact on the individual decisions were not taken into account.

As a result, the action should be considered over several decision steps away ( package solution).

Not rationality

In reality, many factors play a role, by the assumed rational decision choice does not come to fruition in economic theories. The rationality in economic theory focuses solely on the outcome of actions. In contrast, a value rationality are found in about the consequences of action beyond the act itself still has a value. Causes can in ethical, religious aspects and other personal preferences of beliefs and value systems are.

If the decisions and actions of the members of a group are not made ​​solely on the basis of rationality, various reviews of the "best" result might appear. As a result, it may not be all the members of the collective consistently clear what is the best result. In addition, the problem of Arrow 's theorem.

Example

The performance of a street artist everyone can enjoy the same degree. The individual viewers from the weigh whether he should voluntarily pay an amount or not. Since, in his view, other spectators could pay, he will not even pay and shift the responsibility for the payment to the other passers-by. Acting all viewers alike, the street artist will stop his performance due to lack of payment in the future.

It is believed that the performance for each individual brings a consumption of 2 units of money. The artist needs 60 units of money in order to live by his performance. If 60 viewers listen in total, each of them would have to pay one unit of money. The decision table shows the resulting outcomes. Would any of the spectators pay, could all get to enjoy since the artist will perform. Pays not only an individual and the others, the individual has suffered a loss, since the artist is still not present. Does not pay the individual and pay the others is the benefit to the individual is greatest, as it saves the issue and offering of the artists further. Numbers all viewers not, he will no longer occur street performers. From the perspective of the group performance is obtained only if everyone paid. From the individual perspective, the benefit is greatest if he does not pay and will rely on that to pay everyone else.