Focal Points V: Popular Culture

Photo by Donald Tong on

Futurist and businessman Peter Schwartz in his book The Art of the Long View (1991,1996) suggests that firms should attempt to navigate uncertainty by constructing possible scenarios depicting the best- and worst-case scenarios for the business. Schwartz’s proactive and unorthodox approach to business suggests that we accumulate market information from an array of various sources to formulate a model that has the greatest degree of acuity possible.

One unlikely taproot for market information and patterns per Schwartz is popular culture. From Long View:

“… You may think popular music affects only kids. But those kids are all over the planet, and the effects last their entire lives. I once went to a Paul McCarthy concert that was, in effect, one big Beatles sing-along with people in their forties. The psychedelic mindset of “Lucy in the Sky with Diamonds”, and the delicious view of the world in “Here Comes the Sun” deeply affected the culture.

Today, I pay attention to rap music and world music –­ the fusion of ethnic threads from all over the equatorial world. I don’t think that business people will have to start putting “rap-speak” into their employment applications, but rap music will dramatically affect business nevertheless. These are not love songs; they are songs of anger. That rage begins to surface, with some still unknown racial event as the final trigger. ( This book was written several years before the Rodney King riots in L.A. that gave expression to that anger)….”

It seems as if Schwartz may have inadvertently stumbled upon a focal point or Schelling Point when he justifies utilizing contemporary culture as a potential bridge for the information asymmetries in consumer markets. Pop culture is a point of convergence for us all, whether for productive uses or purely entertainment. Being ignorant of pop culture can impact your social life; celebrity culture, sports, current music, and obscure references from popular movies; dominates topical conversations among Americans. It even has a hand in shaping circumstances in domestic politics. This statement is substantiated by the shrewd observation made by Andrew Breitbart: “Politics is downstream from culture”. It might be worthwhile to be aware of the newest pop culture trends.

Focal Points- Part IV: Truth, The Ultimate Focal Point!

Photo by Magda Ehlers on

In-game theory, the concept of a focal point is a conceptual locus of convergence in the absence of pre-arranged communication. Generally, these mutually agreed-upon center points are culturally contingent. Although, there is one focal point that transcends culture and is arguably the ultimate point of unspoken convergence; that is truth. Some social commentators claim that truth is relative, quickly dispelling the argument that truth is a universal focal point. The facts are the facts. When something is axiomatically true, it is self-evident. To claim that truth is subjective is a puzzling assertion. We cannot simply deny the laws of mathematics, then suddenly, the rules governing the order of operations become invalid. The assumption of truth being subjective confuse methodology with results. Pluralism is valid so long as it reflects the truth. For example, there are multiple ways to solve an equation, but only one correct answer.

When people formulate rules, they must do so in a manner congruent with the immutable laws of the social and natural sciences. Otherwise, we will fall victim to the natural consequences of violating these eternal laws. Truth is such a magnetic focal point that it is inescapable. Sure, it is possible to contrive a convincing delusion, but while delusions may dissolve, the truth remains fixed. Regardless of whether we are truth-orientated immutable facts pull us in like the force of gravity bringing us back down to Earth. We can fight gravity; however, even when interpersonal communication is absent, any semi-rational person already knows that such resistance is inevitably futile.

Prisoner’s Dilemmas- VI: Job Interviews & Telling the Truth

Photo by Tima Miroshnichenko on

The game-theoretical concept of a “Prisoner’s Dilemma” applies to situations where no overt defection has occurred. Many readers may be perplexed by this assertion since, by definition, Prisoner’s Dilemmas entail “players” selecting uncooperative strategies. However, there are scenarios where the selection of a specific approach could lead to non-optimal outcomes. But such a strategy would not be considered a direct form of defection. These strategies are analogous to a defecting because the participating economic agents are moving away from a given focal point; rather than converging upon it. Even though the participants are not directly undercutting each other but inadvertently select noncooperative strategies. One salient example of this is any situation in which both parties choose to lie to the other. Both agents believe it is in their self-interest to obscure the truth, but doing so will only engender more problems.

A novel application of this theory would be in job interviews. Why? The hiring manager and the applicant concurrently have incentives to distort the facts. The prospective employee stands to benefit from embellishing their credentials. Likewise, the hiring manager might think it is shrewd to exaggerate or overemphasize the company culture when it is difficult to find a qualified candidate. When used in unison, the consequences are disastrous. The new employee will not be unqualified for the position and will also have unrealistic expectations for the job role. Ultimately, creating more issues for the hiring manager and the jobseeker. Telling a lie may not be a direct form of uncooperative behavior, can often yield similar results.

Focal Points- Part I: What is A Schelling Point

Photo by Rhalf Ryan Gejon on

One of Thomas Schelling’s best-known contributions to Game Theory was the concept of a focal point. Otherwise known as “Schelling point”. What is a focal point? We oftentimes hear the term being thrown around colloquially in various settings. Ranging from office board meetings to pundits on network news stations. The common definition of the term slightly differs from its connotation in Game Theory. The common definition of a focal point connotes a point of convergence. A central point from which all other connections radiate. This definition isn’t antithetical to how the term is used in Game Theory. Since most of these assumptions are implicit in the game-theoretical definition. A focal point from Dr. Schelling’s perspective operated as a conceptual bridge in the absence of clear communication. A focal point bridges the gap between information asymmetries when correspondence is lacking.

A focal point is particularly important in what is known as a coordination game. Simply put, coordination games are situations where the players benefit from assuming the same course of action. It can be assumed that in such scenarios nash-equilibrium is faithfully upheld by all participants. Because all players are conforming to the behavior of their opponents. Schelling’s conception of focal point may be applicable even in scenarios outside of the context of coordination games. A focal point could also be seen as a cultural-contingent point of reference, that can serve as a beacon of hope in contextual circumstances fraught with ambiguity. There are certain locations, times, dates, and people that serve as focal points to individuals of various cultural groups. The recognition of these focal points functions on a continuum ranging from locally acknowledge focal points to internationally renowned points of reference. A local bar may be a focal point to residents but in contrast the Panama canal a world-renown point of reference. While Schelling points may be an ingrained feature of coordination games we do see them peppered throughout our daily lives.

In Schelling’s seminal book The Strategy of Conflict (1960)  the Nobel laureate details one of the most widely cited examples of a focal point in game theory.

You are to meet somebody in New York City. You have not been instructed where to meet; you have no prior understanding with the person on where to meet, and you cannot communicate with each other. You are simply told that you will have to guess where to meet and that he is being told the same thing and that you will just have to try to make your guesses coincide. (Schelling, 1960, p. 56).

The only tool at your disposal would be to use a common point of reference in the lack of proper information be a common point of reference. In London, England it may be a shrewd strategy to meet at the Big Ben clocktower. However, opting to meet at “Big Ben” in NYC would be wholly inappropriate. A better potential meeting place would be the Empire State Building. In the absence of any cultural context, this task becomes nearly impossible. Without any cultural consensus, it becomes difficult to ascertain what is a crucial landmark. Not only consensus required but also the ability to rank the salience and notoriety of the location is necessary. Your favorite coffee shop in Greenwich Village maybe your favorite location in all of the city, but odds are you wouldn’t find the other “player” at this location in the absence of clear communication. These broad approximations are far from perfect science. One “player” waiting at Central Park and the other waiting at the Empire State Building are rational strategies. Both players missed the mark.

The conventional definition of a focal point isn’t completely different than how the term is used in Game Theory. From a game-theoretical standpoint, does have a “centering effect”. It serves more to operate as a tool to navigate the perils of imperfect information, rather than a noun describing the spatial origin of the reference point or a clumsy synonym for a talking point. When properly estimated by coordinating actors it does effectively operate as a point of convergence. It is just a matter of fine-tuning the location.