The tragedy of the conventions

It is tempting to think that in an ideal world our social problems would be little more than coordination games. In such cases, all actors have aligned incentives and, moreover, reliable means of establishing a socially optimal convention. For one thing, those with compatible strategies can learn to interact more often with each other. For another, they can signal to others that they would adopt the optimal convention, so long as enough others are also willing. But what if coordination games are interdependent , such that the value of coordinating in one game depends on the degree of coordination in some other game? We show that in these cases, these once reliable mechanisms become unreliable and even counterproductive. We call this phenomenon the tragedy of the conventions .