Double marginalization refers to the phenomenon where even if every firm in a supply chain chooses actions to maximize its own expected profit, the total profit earned in the supply chain may be less than the entire supply chain's maximum profit. In other words, rational and self-optimizing behavior by each firm of the supply chain does not lead to optimal supply chain performance.

In even simpler terms, double marginalization occurs when firm's try to increase their "piece" of the supply chain's "profit pie" and, as a result, the total size of the "pie" decreases. We discussed how contracts such as buy-back contracts and revenue sharing contracts could mitigate this effect by "shifting" costs and risks around the supply chain (and, as a result, increase the size of the "pie").

For this question, please identify a phenomenon similar to double marginalization from your own personal life, working experience, or that you observed in practice. Namely, identify and describe a case where two people or companies act in a rational self-interested manner and, as a result, obtain an outcome that is worse than if they coordinated and shared risks or costs. Then, discuss how a different kind of contract or coordination could mitigate double marginalization in this case. (A qualitative discussion suffices - no need to give numbers)