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economicsgame theorysocietyconventionsSeptember 17, 20263 min read

Which Side of the Road? Nobody Cares, As Long As Everybody Agrees

By the BrainSnail editorial team. How these articles are written and checked, and how to tell us when one is wrong.

Some situations have no conflict of interest at all and are still hard, because everybody needs to make the same choice and nothing says which choice it should be.

What makes it different

In most situations studied by game theory the participants want different outcomes and the difficulty is the conflict between them. Here the participants want the same thing, namely to match each other, and the difficulty is that there is more than one way to match. Two drivers approaching each other both want to avoid a collision and are indifferent between passing on the left or on the right, provided they agree. The problem is entirely about which of several equally good arrangements everybody settles on, and nothing in the payoffs picks one out.

Everyday examples

The pattern is far commoner than the conflict situations that get more attention:

  • Which side of the road traffic drives on
  • Which measurement system, plug shape or file format is used
  • Which language two strangers speak to each other
  • Which messaging application a group of friends uses
  • Which day a weekly meeting is held
  • Whether to arrive at an event on time or fashionably late

How agreement is reached

Thomas Schelling studied how people converge without communicating and found that they use anything that makes one option stand out. Asked to meet a stranger in a city on a given day with no way to arrange it, large majorities of people choose the same famous landmark and the same round hour, not because those are better but because they are obvious. Anything that makes an option conspicuous will do, including precedent, a round number, a symmetry or a shared reference. Once one option is used, its use makes it more obvious still, which locks it in.

When the options are not equal

Most real cases are messier than the pure version, and the complication is that participants usually do have a preference between the matching arrangements. Two people want to spend the evening together and one prefers a concert while the other prefers a film, so any agreement beats disagreement and each would rather the agreement went their way. That combination produces bargaining rather than simple convergence, and it explains a great deal of standards politics, where every firm wants a common standard and wants it to be the one built around its own technology.

Why the wrong answer persists

Because matching is what matters, an inferior arrangement that everybody already uses is extremely difficult to replace. Any individual who switches unilaterally is worse off, so nobody moves first even when everybody agrees a different arrangement would be better. That explains the survival of awkward standards long after better ones exist, and it explains why the changes that do happen are coordinated deliberately, by legislation, by a large organisation moving everybody at once, or on a single announced date. Sweden changed which side of the road it drove on overnight in 1967 for exactly that reason.

The takeaway

Where everybody wants to match and several matching arrangements are equally good, the difficulty is choosing between them rather than any conflict of interest. People converge on whatever option is conspicuous, and conspicuousness comes from precedent as much as from merit. Switching alone makes you worse off, which is why poor standards persist and why changes are made on a single announced date.

Practise this

Questions from Advanced Economics

Reading about something is not the same as being able to recall it. These are real questions from the Advanced Economics unit in our Economics track, answers and explanations included. The unit has 120 in total across 23 steps.

  • Choose all that applyLevel 2

    1. Which of these does econometrics actually use? Select all that apply.

    • Data collected from the real worldcorrect
    • Statistics and graphscorrect
    • Finding relationships between variablescorrect
    • Guessing with no numbers at all
    • Only opinions and feelings

    Econometrics leans on real data, statistics, and measured relationships, not guesses.

  • Fill the blankLevel 2

    2. When many people share a resource that no one owns, like a fishing lake, it can get overused. This is called the tragedy of the ____.

    • commonscorrect
    • market
    • savings
    • tariff

    The tragedy of the commons is when a shared, unowned resource gets used up too fast.

  • Odd one outLevel 3

    3. Which of these is a FISCAL policy tool, not a monetary policy tool?

    • Changing income tax ratescorrect
    • Open market operations
    • The discount rate
    • The reserve requirement

    Taxes and government spending are fiscal tools set by the government, while the others are monetary tools of the central bank.