scenario
A wife and husband ready to meet this evening, but cannot remember if they will be attending the opera or a boxing match. Husband prefers the boxing match and wife prefers the opera, though both prefer being with each other to being apart. Thus, while both of them prefer to find themselves at the same place, the wife and husband cannot agree which event to attend. This is an example of a coordination game. When expressed in the ordinary form, it becomes evident that there are two pure policy (and one mixed policy) equilibria.
Description
There are two pure policy equilibria. Different pure policy equilibrium is favored by each player. However, either equilibrium is favored by both players to any of the non-equilibrium outcomes. Thus, both equilibria are Pareto optimal. Mixed policy equilibrium also exists.
Example
|
Husband
|
|
|
|
boxing
|
opera
|
|
Wife
|
boxing
|
1,2
|
0,0
|
|
opera
|
0,0
|
2,1
|
General Form
|
|
Player 2
|
|
|
L
|
R
|
|
Player 1
|
U
|
I,V
|
II,VI
|
|
D
|
III,VII
|
IV,VIII
|
Where the following relations hold:
IV>I>II; IV>I>III
V>VIII>VII; V>VIII>VI