Failure of coordination
A coordination failure occurs when the members of a group do not reach a viable preferable one in itself result for the group. The participants do not cooperate, although it would pay off for everyone in the overall result. Coordination failure is independent of the group size and can occur in small groups as well as in entire societies .
causes
public goods
Due to their properties of non-rivalry and non-excludability , public goods have no price or no price can be assigned to the individual for the good (no individual opportunity costs ). There is no market for these goods and they can be used without having to pay for them. The costs incurred do not have to be paid for, nor can remuneration be enforced for what has been achieved ( external effects ).
The benefit maximization brought about by the pricing does not take place because the uniform coordination medium price does not exist. This results in a discrepancy between the individual goal of the individual and the collective goal of the group in the choice of action .
history
A large number of developments have only been able to establish themselves on the basis of historical circumstances (example: QWERTY arrangement on keyboards ). Over time, these reasons have ceased to exist and much better, sometimes superior, developments have emerged. Due to its widespread use and acceptance, the inferior convention has developed into a standard. The group fails to change the convention collectively, even though it would be the most beneficial result for the group. Each of the two conventions represents a balance in itself.
As long as everyone follows the same (unfavorable) agreement, it is associated with additional effort for the individual to learn or use the new technology. The standard is therefore maintained or maintained jointly ( lock-in effect ). In order to break such a pattern, measures are required to induce a critical mass to give up the old standard. This means that the additional effort made by the individual for the new technology / process becomes less important and the new convention can develop fully due to its technical advantages.
Step-by-step action
If the actions are carried out in stages in a group, there is a risk that the individual's short-term gain overlooks the overall result. Since preferences can shift for each new action, a series of decisions can mean a small gain for the majority of the group members. On the other hand, there is a total negative result for the group, as the effects were not taken into account in the individual decisions.
As a result, actions should be considered across several decision-making steps (package solution).
Non-rationality
In reality, many influencing factors play a role that economic theories do not take into account because of the assumed rational choice of decision . The rationality of purpose in economic theories focuses solely on the outcome of actions. In contrast, a value rationality can be set in which, beyond the consequences of the action, the action itself has a value. The reasons for this can be found in ethical, religious aspects and other personal preferences based on convictions and value systems .
If the decisions and actions of the members of a group are not made solely on the basis of functional rationality, various evaluations of the “best” result can result. As a result, it may not be unanimously clear to all members of the collective what the best result is. In addition, the problem of the Arrow theorem .
example
Everyone can enjoy the performance of a street artist to the same extent. The individual viewer weighs up whether he should voluntarily pay an amount or not. Since, from his point of view, other viewers could also pay, he will not pay himself and will shift responsibility for payment to other passers-by. If all spectators act equally, the street performer will refrain from performing in the future due to the lack of remuneration.
It is assumed that the performance brings a benefit of 2 monetary units for each individual. The artist needs 60 monetary units to be able to live from his performance. If a total of 60 viewers are listening, each of them would have to pay 1 monetary unit. The decision table shows the resulting results. If each of the viewers paid, everyone could get the benefit as the artist continues to perform. If only one individual pays and the others do not, the individual has suffered a loss because the artist will still not continue to perform. If the individual does not pay and the others pay, the benefit for the individual is greatest, as he saves the expense and the artist continues to offer. If none of the spectators pay, the street artist will no longer perform. From the group's point of view, the performance will only be received if everyone pays. From an individual's point of view, the benefit is greatest when he does not pay and relies on everyone else to pay.
| Decision matrix street artist | all other viewers | ||
| pay (voluntarily) | don't pay | ||
| single viewer | paid (voluntarily) | 1 (= 2 - 1) | - 1 (= 1 - 2) |
| does not pay | 2 (= 2 - 0) | 0 (= 0 - 0) | |
literature
- AK Dixit , BJ Nalebuff: Game theory for beginners , Schäffer-Poeschel, Stuttgart 1997.
- M. Fritsch, T. Wein, H.-J. Ewers : Market Failure and Economic Policy , Franz Vahlen, Munich 2005.
- G. Knieps: Competition Economics: Regulation Theory, Industrial Economics, Competition Policy , Springer, Berlin 2008.
- HR Varian: Fundamentals of Microeconomics , Oldenbourg, Munich 2004.
supporting documents
- ↑ See Knieps: Competitive Economy, p. 231
- ↑ See Varian: Grundzüge der Mikroökonomik, p. 618
- ↑ See Fritsch / Wein / Ewers: Marktversagen und Wirtschaftsppolitik, p. 88
- ↑ Cf. Dixit / Nalebuff: Game Theory for Beginners, p. 225ff.
- ↑ Cf. Dixit / Nalebuff: Game Theory for Beginners, p. 238ff.
- ↑ See Fritsch / Wein / Ewers: Marktversagen und Wirtschaftsppolitik, p. 354