PUP-3002 Lecture 38: pup lecture 38
5 Apr 2018
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Document Summary
Coordination problems arise because there are different preferences and the absence of clear rules. Both have the same underlying goal, but have different preferences of how to attain it. When making decisions, they are unable to coordinate and end up making suboptimal choices. Olga wants to see the new meryl streep flick. Both would rather see the movie with the other actor, rather than see any movie alone problem. They have to go to one movie theatre without speaking to one another. If sven and olga both pick schwarzenegger, sven is really happy. If sven and olga both pick streep, sven is less happy. If sven and olga pick different movies, sven is least happy. If sven and olga both pick streep, olga is really happy. If sven and olga both pick schwarzenegger, olga is less happy. If sven and olga pick different movies, olga is least happy (see visual chart slide 38)
