Rational players can correlate strategies without communicating, even with conflicting preferences

Evidence

It should be emphasized that bargaining-game solutions that (like the Nash and Harsanyi solutions) depend on a clearly recognized zero point—that is, on an unambiguous outcome that reigns in the absence of overt agreement—cannot necessarily be applied to a cooperative game that is based on a matrix of choices. A matrix (unless perhaps all payoffs are zero except in the diagonal) does not have a zero point defined by the rules. There is consequently no “normal form” consisting of a convex region and associated zero point unless there is available a fully adequate theory that “solves” the tacit game (and does so in a manner that the players can take for granted). One may, following Luce and Raiffa (for example, page 137) take the players’ “security levels” (maximin values) as the zero point; but this is either arbitrary or based on the hypothesis that, left to themselves, the players could succeed in doing no better than this in the tacit game. The latter hypothesis, especially where there are pure-strategy efficient points (as in Braithwaite’s game, and as in the Luce-Raiffa matrix discussed in note 18 below), is a weak hypothesis that can be empirically refuted; it assumes that rational players are incapable of correlating strategies without communicating, while in fact this is something they often can do even in the face of conflicting preferences. — Thomas C. Schelling, The Strategy of Conflict, 851

Categorization

• DEEPTHINKING: Schelling’s own point — that tacit focal-point coordination refutes the assumption that rational players need communication to achieve efficient outcomes — is the conceptual seed of his whole coordination theory and resists easy summary.
• XREF: Directly connects to the reader’s analytical frame: Milgrom/North/Weingast on private judges and Gambetta on the Mafia rely on parties coordinating on focal expectations absent formal enforcement. — connects to: Frequent repeated interaction makes cooperative trade equilibria feasible, whereas infrequent trade does not.; Mixed-motive games require tacit social coordination absent from zero-sum games — Thomas C. Schelling, The Strategy of Conflict, 367; Rational players must factor non-mathematical focal details into strategy — Thomas C. Schelling, The Strategy of Conflict, 257 (+6 more)

Related

• Tacit coordination supplies the empirical premise Nash solution concepts require (similarity 0.86)
• Mixed-motive games require tacit social coordination absent from zero-sum games (similarity 0.86)
• Rational players must factor non-mathematical focal details into strategy (similarity 0.86)
• Rational players cannot opt out of social coordination when efficiency requires it (similarity 0.84)
• Rational agreement operates through shared psychic expectations, not mathematical reasoning (similarity 0.83)
• Explicit bargaining outcomes rest on prior tacit coordination between rational players (similarity 0.83)
• Any coordinated expectation is rational regardless of how the players arrived at it (similarity 0.83)
• Any theory of strategic coordination has an inherently empirical component (similarity 0.83)
• Tacit bargaining over distribution can be conducted only through play itself. (similarity 0.83)
• The bargaining solution’s appeal derives from its focal quality, not its formal derivation (similarity 0.82)
• Game theory succeeds on pure conflict but fails on mixed conflict-cooperation (similarity 0.82)
• Coordination play seeks a meeting of minds while minimax play avoids any (similarity 0.80)
• Even explicit bargaining relies on tacit signals to coordinate expectations (similarity 0.80)
• Unilateral, non-reciprocal communication can coordinate both parties’ expectations (similarity 0.80)
• Coordinate behavior emerges from conventions and impromptu codes without explicit plans (similarity 0.80)

Broader Connections

• Mixed-motive games require tacit social coordination absent from zero-sum games #expands (0.82) — Thomas C. Schelling, The Strategy of Conflict, 367
• Explicit bargaining outcomes rest on prior tacit coordination between rational players #corroborates (0.80) — Thomas C. Schelling, The Strategy of Conflict, 858
• Rational players must factor non-mathematical focal details into strategy #expands (0.78) — Thomas C. Schelling, The Strategy of Conflict, 257
• Cooperation can occur without trust when incentives align #corroborates (0.77)
• Rational players cannot opt out of social coordination when efficiency requires it #expands (0.75) — Thomas C. Schelling, The Strategy of Conflict, 370
• Bargaining situations are imperfect-correlation-of-preferences games #qualifies (0.74) — Thomas C. Schelling, The Strategy of Conflict, 213
• Cooperation unravels without iterated mutual knowledge of cooperative intentions. #qualifies (0.72)