Sometimes referred to as a double coincidence, a coincidence of wants is a situation in which two parties agree to barter services or goods other then money in order to fulfill a want that each party currently has. This medium of exchange is usually limited in scope and will likely require certain factors such as time and place to coincide in order for each party to derive satisfaction from the exchange. In spite of the limitations, this approach is often used in a number of settings to the mutual benefit of both parties involved.
An easy way to understand how a coincidence of wants may occur is to consider a tenant who has lost his or her job and is unable to pay the rent. The landlord currently has a couple of empty apartments that need to be painted before advertising the units to new tenants. Assuming that the jobless tenant possesses the skills needed to paint those apartments, the two parties may come to an agreement in which the landlord provides the paint and other supplies, and the tenant provides the labor. In exchange for the tenant’s efforts, the landlord agrees to accept that labor as payment for the month’s rent. As a result, the landlord saves money on the painting job and the jobless tenant is allowed to stay one more month, hopefully securing a job before the rent is due again.
This same general concept of a coincidence of wants can be applied in a number of scenarios. A courier service may offer a certain amount of free deliveries to a supplier in exchange for providing goods or services that are necessary to the ongoing operation of that service. A baker may offer cakes to the owner of a vegetable stand in exchange for a reasonable quantity of tomatoes. A plumber who needs a car tune-up may agree to swap services with a mechanic who has a clogged drain. In all these scenarios, each party has a want that must be met, and each party has the wherewithal to meet the other party’s want.
The circumstances that come together to create a coincidence of wants place this type of exchange outside typical business transactions in which money can be used to complete those transactions. In theory, money can be used as the medium of exchange at any time. By contrast, specific circumstances of time, place, and event must come together in order for a coincidence of wants to occur. There is usually only a limited period of time in which the barter or exchange can occur before one or both parties determine that the want can be met by some other means and the interest in working together to satisfy those wants has passed.