Explicit bargaining outcomes rest on prior tacit coordination between rational players

Evidence

Viewed in this way, the intellectual process of arriving at “rational expectations” in the full-communication bargaining game is virtually identical with the intellectual process of arriving at a coordinated choice in the tacit game. The actual solutions might be different because the game contexts might be different, with different suggestive details; but the nature of the two solutions seems virtually identical since both depend on an agreement that is reached by tacit consent. This is true because the explicit agreement that is reached in the full-communication game corresponds to a priori expectations that were reached (or in theory could have been reached) jointly but independently by the two players before the bargaining started. And it is like a tacit agreement in the sense that both can hold confident rational expectations only if both are aware that both accept the indicated solution in advance as the outcome that they both know they both expect. — Thomas C. Schelling, The Strategy of Conflict, 858

Categorization

• XREF: Connects directly to Gambetta’s private-protection-markets thesis: the Godfather-bond works because both parties hold confident expectations that both accept the arbiter’s solution in advance. Also relates to Milgrom’s private judges coordinating focal expectations. — connects to: Mafia norms function as a self-perpetuating Nash equilibrium; Any coordinated expectation is rational regardless of how the players arrived at it — Thomas C. Schelling, The Strategy of Conflict, 653; Tacit coordination supplies the empirical premise Nash solution concepts require — Thomas C. Schelling, The Strategy of Conflict, 669 (+13 more)
• DEEPTHINKING: The claim that explicit agreement merely ratifies pre-existing tacit coordination collapses the traditional dichotomy between communication and tacit bargaining — a genuinely reversible-seeming point about what ‘agreement’ means.

Related

• Tacit and explicit bargaining form one continuum dependent on coordinated expectations (similarity 0.88)
• The bargaining solution’s appeal derives from its focal quality, not its formal derivation (similarity 0.86)
• Tacit coordination supplies the empirical premise Nash solution concepts require (similarity 0.85)
• Even explicit bargaining relies on tacit signals to coordinate expectations (similarity 0.85)
• Tacit bargaining over distribution can be conducted only through play itself. (similarity 0.85)
• Tacit bargaining requires coordinating on equivalent solutions, not just equal-valued ones (similarity 0.84)
• Bargaining outcomes rest on convergent reflexive expectations, not on force or merit (similarity 0.84)
• Rational agreement operates through shared psychic expectations, not mathematical reasoning (similarity 0.84)
• Rational players can correlate strategies without communicating, even with conflicting preferences (similarity 0.83)
• Tacit-bargaining theory guides where to seek terms, not their probability (similarity 0.83)
• Any coordinated expectation is rational regardless of how the players arrived at it (similarity 0.82)
• Any theory of strategic coordination has an inherently empirical component (similarity 0.80)
• Players can derive coordination signals from labels and connotations beyond payoff structure (similarity 0.80)
• Rational players must factor non-mathematical focal details into strategy (similarity 0.79)
• Pre-arranged communication infrastructure raises the odds tacit bargaining succeeds (similarity 0.79)

Broader Connections

• Tacit and explicit bargaining form one continuum dependent on coordinated expectations #corroborates (0.95) — Thomas C. Schelling, The Strategy of Conflict, 186
• Even explicit bargaining relies on tacit signals to coordinate expectations #expands (0.90) — Thomas C. Schelling, The Strategy of Conflict, 187
• Bargaining outcomes rest on convergent reflexive expectations, not on force or merit #corroborates (0.90) — Thomas C. Schelling, The Strategy of Conflict, 177
• Tacit-bargaining theory guides where to seek terms, not their probability #expands (0.80) — Thomas C. Schelling, The Strategy of Conflict, 189