Schelling Point

Nov 25, 2022

Let's say you are playing a game where you need to meet someone in New York City. You can't communicate with the other person to agree on a meeting time or place – where would you think to meet, and at what time?

There are countless times and places to meet. The task becomes a coordination game – what time and place do you think the other person is likely to choose?

A good guess might be Grand Central at noon. A place with a reputation for being a meeting place and a time that is traditionally seen as the middle of the day.

In the absence of communication, the solutions that people converge upon by default are called Schelling points.

These coordination games exist in all types of markets – how companies price products, where people live, what platform users post content, and what distribution channels companies use.