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Schelling point

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In game theory, a Schelling point (also called focal 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 has been introduced by the American economist Thomas Schelling in his book The Strategy of Conflict (1960).

Consider a simple example: two 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.


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Topics in game theory
Definitions Normal form game · Extensive form game · Cooperative game · Information set · Preference
Equilibrium concepts Nash equilibrium · Subgame perfection · Bayes-Nash · Trembling hand · Correlated equilibrium · Sequential equilibrium · Quasi-perfect equilibrium · Evolutionarily stable strategy
Strategies Dominant strategies · Mixed strategy · Grim trigger · Tit for Tat
Classes of games Symmetric game · Perfect information · Dynamic game · Repeated game · Signaling game · Cheap talk · Zero-sum game · Mechanism design
Games Prisoner's dilemma · Chicken · Stag hunt · Ultimatum game · Coordination game · Matching pennies · Minority game · Rock, Paper, Scissors · Pirate game · Dictator game
Theorems Minimax theorem · Purification theorems · Folk theorem · Revelation principle · Bishop-Cannings theorem
Related topics Mathematics · Economics · Behavioral economics · Evolutionary biology · Evolutionary game theory · Population genetics · Behavioral ecology · Adaptive dynamics · List of game theorists

 


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