Cobra Effect · Decisions and strategy
Schelling points
Without talking, people meet at whatever stands out.
6 cards, read aloud in 2:33, with a test and sources.
You must meet a stranger in New York tomorrow. You can’t contact them. Where do you go?
You don’t know them. They don’t know you. You both know only this. You have to find each other, somewhere in the city, some time tomorrow. Think about it for a moment before you read on.
Thomas Schelling put the question to his students in the 1950s.
Most of them said the same thing. Grand Central Terminal, under the clock, at noon. Nobody had agreed it. Nothing made it the right answer. It was just the answer they expected everyone else to expect.
That is a Schelling point, or a focal point.
He published it in The Strategy of Conflict in 1960. When people must coordinate without talking, they converge on whatever stands out. Noon, not 11:47. The biggest landmark, not the third biggest. The choice wins not because it is best but because it is obvious, and everyone knows it is obvious to everyone.
The results were lopsided in ways that had nothing to do with logic.
Asked to pick heads or tails to match a stranger, a large majority said heads. Asked to split $100 with a stranger, with nothing for either if the split disagreed, nearly everyone said 50 each. Heads is not better than tails. Fifty is not fairer than 49. It is just the one that everyone can guess everyone will guess.
Focal points run more than lost tourists.
Round number prices. Borders that follow rivers. Ceasefire lines that stop at a road. Schelling’s deeper point was about war. Two enemies who cannot talk can still keep a limit, if the limit is obvious. He won a Nobel prize in 2005 for that kind of thinking. A limit nobody can quite describe is a limit nobody can hold.
How to use it.
When you need people to coordinate and you can’t brief every one of them, don’t pick the best option. Pick the obvious one. The clock everyone knows, the round number, the rule that needs no footnote. And when you are lost from someone, don’t go looking. Go to the place they would guess you would guess.
Sources
- Focal point, Wikipedia. The New York question, the coin, the split, and how focal points work when people cannot talk. Search Schelling point as well, both names are used.
- The Strategy of Conflict, Thomas Schelling, 1960. The book, written in the shadow of nuclear war, that asked how enemies coordinate. Chapter three has the New York question and the informal polls of his students.
- Thomas Schelling, Wikipedia. The economist who thought about bargaining, deterrence and segregation with the same few tools, and the 2005 Nobel prize.
Nearby ideas
- The prisoner’s dilemma. Why two sensible people can both choose the worst outcome.
- Anchoring. The first number you hear bends every estimate that follows.
- Network effects. Why the biggest network tends to swallow the rest.
- Two-way doors. Decide reversible things fast, and save care for what you cannot undo.
- The Pareto principle. A few causes usually produce most of the results.
- The Eisenhower matrix. Urgent things crowd out important ones unless you protect them.
- Hofstadter’s law. It always takes longer than you expect, even when you allow for that.
- Ulysses contracts. Bind your future self before the temptation arrives.