&gt; <i>In one view, things can look perfectly rational. In the other view, things can look stark raving mad. I don&#x27;t think either point of view is distinguished as canonical.</i><p>I&#x27;d say that&#x27;s not the point. The point is, individual selfish choices aimed at producing good outcome for the choicemaker start to produce bad outcomes <i>for the choicemaker</i> when everyone else makes the same choice too, but at this point it&#x27;s too late to leave the ship.<p>A canonical toy example would be working overtime. Say everyone is working 8 hours, but you decide to stay one hour longer. The boss notices and gives you a bonus for your dedication to company. Your co-workers notice, some of them decide to stay an hour longer too. Since the bonus pool is limited, you all get somewhat smaller bonuses. Ultimately so many people stay the extra hour that it turns into a new normal; 8h&#x2F;day workers become seen as slackers and are pushed to 9h&#x2F;day mode to avoid angering the boss. And since it&#x27;s a normal mode, nobody gets bonuses. End result: you work 9h&#x2F;day and get paid the same as you used to be before.<p>The article I linked[0] has much better examples of this happening in real-life.<p>The point is, things can look &quot;stark raving mad&quot; pretty much objectively, because the end result is bad in the choicemaker&#x27;s value system. It&#x27;s easy to get into a coordination trap and incredibly hard to get out of it.<p>[0] - for convenience, <a href="http:&#x2F;&#x2F;slatestarcodex.com&#x2F;2014&#x2F;07&#x2F;30&#x2F;meditations-on-moloch&#x2F;" rel="nofollow">http:&#x2F;&#x2F;slatestarcodex.com&#x2F;2014&#x2F;07&#x2F;30&#x2F;meditations-on-moloch&#x2F;</a>