There are many information problems that are both economic and communicative in terms of coordination and even in the most basic cooperation or non-cooperation. Tom Schelling gave us an early step on that evolutionary path. He has as most hope for, various models and even a dilemma and a point named for him.
One of his famous examples involves two strangers who are instructed to meet each other on a particular day in New York City. Unable to communicate, they look for an obvious place to meet, so obvious that each will know that it is obvious to both of them. At the time that Schelling was writing, the information desk at Grand Central Station provided just such a focal point. In this case, people achieved coordination not by speculating on what the other would do but by identifying a common course of action with the understanding that the other party was trying to do the same. Typically, the solution entailed a set of actions that stood out among its numerous alternatives. Hence, there was no uniquely ‘correct’ answer. What made an alternative ‘correct’ was simply that enough people thought so.
There is nothing that makes Grand Central Terminal 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".
Thomas Schelling was born in 1921 in Oakland, California. He received a BA from the University of California at Berkeley in 1944 and a Ph.D. in economics from Harvard University in 1951. Between 1948 and 1953 he worked in foreign aid bureaus in Washington, mostly on negotiations. He taught at Yale University (1953–8), then at Harvard University (1958–90), and finally at the University of Maryland at College Park (1990–2003). He also had a long association with the RAND Corporation, with appointments as an adjunct fellow for most of his career (1956–2002) and as a full-time researcher in 1958. He was awarded the Nobel Prize in economics in 2005.
Schelling is known for works that use the tools of economics to illustrate major social phenomena while also making foundational theoretical advances….
In the 1950s, when Schelling’s academic career took off, policymakers around the globe were consumed by the rivalry between the two nuclear-armed superpowers, the United States and the Soviet Union. His first classic book The Strategy of Conflict (1960), framed the challenge facing the two sides as coordinating on a commonly expected and mutually acceptable outcome. Avoiding nuclear confrontation required the negotiators to focus on a particular set of concessions. The underlying logic, Schelling proceeded to show, applies to a very broad set of problems in which communication is incomplete, if not impossible.
Encyclopedia article: “Thomas Schelling”
January 1, 2007 2005-2009, Social Mechanisms, Timur Kuran
“Thomas Schelling,” The New Palgrave Dictionary of Economics, 2nd ed., vol. 7, ed. Steven Durlauf and Lawrence Blume (London: Macmillan, 2008): 299-302.
Schelling's model of spatial segregation is a milestone in the study of emergent global phenomena based on local social interactions (Schelling 1969; Schelling 1971; Schelling 1978). Schelling's model illustrates how clearly distinctive patterns of spatial segregation (e.g. ghettos) can emerge even if individuals are only weakly segregationist.
Almost at the same time as Schelling, Sakoda (1971) proposed a very similar model based on the same principles. To analyse their models, Schelling and Sakoda used a chessboard and several coins of different colours. Since then, there have been plenty of studies that consider different versions and refinements of these models (Aydinonat 2007). In most cases, the more recent models have replaced the chessboard and the coins with computational grids and agents (Benenson and Torrens 2004). jasss.soc.surrey.ac.uk/...