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In [http://en.wikipedia.org/wiki/Game_theory game theory], a '''focal point''' (also called Schelling point) is a solution that people will tend to use in the [[absence]] of [[communication]], because it seems [[natural]], special or relevant to them. The [[concept]] was introduced by the [[Nobel Prize]] winning American [[economist]] [http://en.wikipedia.org/wiki/Thomas_Schelling Thomas Schelling] in his book ''The Strategy of Conflict'' (1960). In this [[book]] (at p. 57), Schelling describes "focal point[s] for each person’s [[expectation]] of what the other expects him to expect to be expected to do." This type of focal point later was named after Schelling.

In [https://en.wikipedia.org/wiki/Game_theory game theory], a '''focal point''' (also called Schelling point) is a solution that people will tend to use in the [[absence]] of [[communication]], because it seems [[natural]], special or relevant to them. The [[concept]] was introduced by the [[Nobel Prize]] winning American [[economist]] [https://en.wikipedia.org/wiki/Thomas_Schelling Thomas Schelling] in his book ''The Strategy of Conflict'' (1960). In this [[book]] (at p. 57), Schelling describes "focal point[s] for each person’s [[expectation]] of what the other expects him to expect to be expected to do." This type of focal point later was named after Schelling.

Consider a simple example: two [[Person|people]] unable to [[communicate]] with each other are each shown a panel of four squares and asked to select one; if and only if they both select the same one, they will each receive a prize. Three of the squares are blue and one is red. Assuming they each know [[nothing]] about the other player, but that they each do want to win the prize, then they will, [[reasonably]], both choose the red square. Of course, the red square is not in a sense a better square; they could win by both choosing any square. And it is the "right" square to select only if a player can be sure that the other player has selected it; but by [[hypothesis]] neither can. It is the most salient, the most notable square, though, and lacking any other one most people will choose it, and this will in [[fact]] (often) [[work]].

Consider a simple example: two [[Person|people]] unable to [[communicate]] with each other are each shown a panel of four squares and asked to select one; if and only if they both select the same one, they will each receive a prize. Three of the squares are blue and one is red. Assuming they each know [[nothing]] about the other player, but that they each do want to win the prize, then they will, [[reasonably]], both choose the red square. Of course, the red square is not in a sense a better square; they could win by both choosing any square. And it is the "right" square to select only if a player can be sure that the other player has selected it; but by [[hypothesis]] neither can. It is the most salient, the most notable square, though, and lacking any other one most people will choose it, and this will in [[fact]] (often) [[work]].

Schelling himself [[illustrated]] this [[concept]] with the following [[problem]]: Tomorrow you have to meet a stranger in [[New York City|NYC]]. Where and when do you meet them? This is a [http://en.wikipedia.org/wiki/Coordination_game Coordination game], where any place in [[time]] in the city could be an [[equilibrium]] solution. Schelling asked a [[group]] of students this question, and found the most common answer was "noon at (the [[information]] booth at) [http://en.wikipedia.org/wiki/Grand_Central_Station Grand Central Station]." There is nothing that makes "Grand Central Station" a location with a higher payoff (you could just as easily meet someone at a bar, or the [[public]] [[library]] reading room), but its [[tradition]] as a meeting place raises its salience, and therefore makes it a natural "'''focal point'''."

Schelling himself [[illustrated]] this [[concept]] with the following [[problem]]: Tomorrow you have to meet a stranger in [[New York City|NYC]]. Where and when do you meet them? This is a [https://en.wikipedia.org/wiki/Coordination_game Coordination game], where any place in [[time]] in the city could be an [[equilibrium]] solution. Schelling asked a [[group]] of students this question, and found the most common answer was "noon at (the [[information]] booth at) [https://en.wikipedia.org/wiki/Grand_Central_Station Grand Central Station]." There is nothing that makes "Grand Central Station" a location with a higher payoff (you could just as easily meet someone at a bar, or the [[public]] [[library]] reading room), but its [[tradition]] as a meeting place raises its salience, and therefore makes it a natural "'''focal point'''."

==See also==

==See also==

*'''''[[Spotlight]]'''''

*'''''[[Spotlight]]'''''

[[Category: General Reference]]

[[Category: General Reference]]