Complementary agreements are self-enforcing through interdependence and focal points

Evidence

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

Categorization

• XREF: The treasure-map/one-gun example is precisely the kind of hostage-complementarity mechanism Puzo uses when Corleone binds his network — complements with Milgrom et al.’s private judges and Gambetta’s hostage-taking. — connects to: Centralized adjudicators solve trade by combining information storage with dispute resolution — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 79; Formal agreements can strengthen tacit coordination norms. — Thomas C. Schelling, The Strategy of Conflict, 605; Linking indivisible projects enables compensation that separate bargaining forbids — Thomas C. Schelling, The Strategy of Conflict, 88 (+14 more)
• SEED: Could frame an essay on how complementary jeopardy, not trust, is what actually underwrites mafia and trade relationships alike.

Related

• Hostages and shared vulnerability render agreements self-enforcing (similarity 0.82)
• Agreements stay enforceable through the shadow of future bargains (similarity 0.82)
• Common knowledge of mutual confidence makes a focal point self-sustaining (similarity 0.82)
• The nomination of an impartial arbitrator reveals reciprocal coordination between conflicting parties (similarity 0.78)

Broader Connections

• Tacit bargaining requires coordinating on equivalent solutions, not just equal-valued ones #expands (0.85) — Thomas C. Schelling, The Strategy of Conflict, 859
• Trust relationships self-maintain once the parties recognize mutual benefit #exemplifies (0.80)
• In focal-point bargaining small concessions signal collapse and are rejected #expands (0.80) — Thomas C. Schelling, The Strategy of Conflict, 266
• Withholding cooperation becomes power under high interdependence #corroborates (0.78)
• Reciprocal trust creates mutual incentives for trustworthiness #corroborates (0.75) — Nicolas Baumard, A mutualistic approach to morality, 166
• Reciprocity motivations can be self-reinforcing where further interactions are plentiful #corroborates (0.74)
• Binding oneself can paradoxically strengthen one’s bargaining position #corroborates (0.72) — Thomas C. Schelling, The Strategy of Conflict, 60