Coordination Failure

A coordination failure is a situation in which every individual agent makes the best decision available given the choices of others, yet the collective outcome is worse than an alternative that would have been available if the agents had coordinated. The canonical example is traffic: each driver rationally chooses the fastest-looking lane, but the aggregate effect produces congestion worse than if traffic had been centrally routed. Becker's framework is built to identify these failures precisely, because they are the places where rational individual behavior — the kind markets reward — produces outcomes no participant would endorse if presented with them as collective choices. The AI transition is producing coordination failures at multiple scales simultaneously.