The Strategy of Conflict

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Schelling major contribution to game theory,
Schelling’s major contribution to game theory (and the study of culture) was the concept of focal points. He observed that in real life bargaining each player would rather make a concession than fail to reach any agreement at all. And there are a wide range of outcomes that would be preferable to both of them than no agreement at all. Now without some procedure to select among those acceptable alternatives, people might never come to a satisfactory agreement. This is where the key concept of "focal points" comes into play. Schelling defines focal points as "intuitively perceived mutual expectations, shared appreciations, preoccupations, obsessions, and sensitivities to suggestion." He criticized traditional game theorists for failing to recognize that "players" actually achieve much better coordination and cooperation when they are able to rely upon focal points. Although he does not make this analogy, it seems that focal points represent some sort of a "templat! e" or "blueprint" that helps to unify understanding and coordinate action. However, for Schelling, "focal points" are quite arbitrary-whether and to what degree they serve to coordinate action and expectations is the key question.