Coordination failure (economics)

[3] Coordination failure also implies that fiscal policy can mitigate the effects of recessions, or even avoid them entirely, by moving the economy to a higher-output equilibrium.

Focal points are solutions that players choose by default without the presence of communication.

This will lead to a solution where players in the game gain lower payoffs than in the case of successful cooperation, and result in a coordination failure issue.

The curve represents possible output decisions for the individual firm, and it intersects with the 45 degree line at three points, meaning there are three equilibria.

[5][6] In the workplace Jordi Brandts and David J. Cooper study how to overcome coordination failure in a corporate organization, where this issue arises between manager and employees.