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86 Harv. L. Rev. 797 (1972-1973)
The Problem of Coordination: Bargaining and Rules

handle is hein.journals/hlr86 and id is 815 raw text is: MARCH 1973

HARVARD LAW REVIEW
THE PROBLEM OF COORDINATION:
BARGAINING AND RULES
Philip B. Heymann *
Despite the fact that much of the mutual interference generated
by individual activity can be avoided and many new possibilities for
shared benefits created by understandings arrived at prior to action,
individuals frequently fail to coordinate their behavior. Starting
from  a model of rational individual choice, Professor Heymann
demonstrates that some of the difficulties of coordination are inherent
in the process of arriving at ad hoc agreements and argues that many
of these problems can be alleviated by arriving at broader arrange-
ments designed to govern individual behavior, by establishing
rules. Professor Heymann then examines the relationship of gen-
eral rules to more specific arrangements and considers three broad
approaches, in terms of rules, to the problem of coordination. Next,
he analyzes the process of choice of rules. Finally, Professor Hey-
mann explores some of the limitations of his model of coordination
as an explanation of organizational forms and of individual and group
action.
I. INTRODUCTION
A. Coordination as an Instrumental End
F individuals act without first establishing arrangements with
those whom their actions affect and who affect them, each is
likely to be sorry when he sees the price all will pay. Thomas
Schelling provides a rich set of examples in his article, On the
Ecology of ilMicromotives. It is in each fisherman's self-interest to
take as many whales as he can before a competitor does, although
each will regret the excessive depletion of the stock. Each resi-
dent's individual steps to obtain a neighborhood balanced equally
in terms of race are likely to result, Schelling shows, in segregation
for all. If everyone on a highway slows down for several seconds
to take a look at the scene of an accident, all but the earliest to
arrive may be delayed 15 or 20 minutes although no one would
willingly pay that price for the view.'
* Professor of Law, Harvard Law School. B.A., Yale, 1954; LL.B., Harvard,
ig6o.
1 Schelling, On the Ecology of Micromotives, 25 PUB. INTEREST 6i, 65-88
(971).

VOLUME 86

NUMBER 5

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