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.
In a recent blog post, professor Bryan Caplan suggests that bipartisan log-rolling (vote trading) is frequently untenable on wedge issues. Since there is a high degree of polarization in the climate of American politics, winning on contentious political topics that have clear ideological divisions (e.g. abortion and gun control is a zero-sum exchange. Not towing the party line of these policies is tantamount to political suicide for elected officials. Dr. Caplan does provide two conditions under which log-rolling is likely to occur:
“….First, when the two sides, protestations notwithstanding, share similar principles and don’t disagree very much. Like the budget. Or any ultra-boring issue, like fisheries or snow removal. This is what most democratic log-rolling comes down to.
Second, to avert large, sudden deteriorations. The polity will forgive you for passing up endless opportunities to make the country richer or safer. But if life quickly gets much worse, even the most silver-tongued demagogues struggle to keep holding the reins of state…”
Professor Caplan is a very astute and innovative Public Choice scholar, but he ignores a potential third condition under which vote trading may transpire; intrapersonal vote exchange. This example of vote trading is a form of implicit log-rolling (p.101), where policies are entrenched in a specific political party’s platform. By voting for a candidate affiliated with a coalition, the voter must accept all of the planks in the campaign platform, as we cannot cherry-pick the policies an individual candidate or party advocates.
Because of this, we must engage in some degree of policy preference ranking. Potentially, engendering an intrapersonal collective action problem, if a voter favors gun rights ( a conservative position) and open-borders immigration ( a liberal policy), odds are they effectively choose one over the other when voting for the president or another variety of political representatives ( a tradeoff). The policy or sets of policies the voter prefers more; will be the deciding factor. If Jim is a proponent of lax gun laws and lenient immigration laws; but votes for a conservative candidate, we can only surmise he values gun rights more than free immigration. In this scenario, Jim engaged in log-rolling with himself.
The most common form of intrapersonal vote trading is when people contour all of their policy preferences to the platform of a political party. The likelihood that every diehard Republic sincerely agrees with the party on every issue is exceedingly small, but most partisan political participants don’t even allow themselves to question their political beliefs. These individuals exchange any disagreements with their party of choice for the designated status as a loyal member of the political faction. An excellent example of this is former Reaganites supporting the presidency and 2020 candidacy of Donald Trump. Regan was the American king of Neoliberal trade policy; Trump echoes the paleoconservative concerns for globalization. We could provide a convoluted explanation for this discrepancy, but such gymnastics would be superfluous. It is much more probable that these individuals tailored their policy preferences to fit an evolving Republican party than they had a sincere paradigm shift.
A tension between privacy and the interests of law enforcement has eroded the Fourth Amendment. Our weathering privacy rights surfaces only continue to crumble every time Americans face a choice between convenience and anonymity. When we install software we encounter this dilemma known as the privacy paradox. Most people are not inclined to read the fine print when we install new software applications on their electronic devices (computers, cell phones, and tablets); it is a bunch of legalese mumbo-jumbo acting as a temporary barrier to the products and services you desire to use. This inconvenient bulwark is penetrated by agreeing to all the terms and services detailed in the previous fifteen paragraphs. Few, if any, consumers read nor understand what they have consented to. The Privacy Paradox is defined as :
“… the dichotomy of information privacy attitude and actual behavior has been coined the term privacy paradox(Brown, 2001; Norberg et al., 2007)”.
Essentially, most people profess to care about privacy but are willing to give it up in the short term to gain access to various digital products and services. The logic of this paradox seems oxymoronic until you realize that people lack patience and an extensive attention span. This contradiction validates the observations of Thomas Schelling’s theory of Egonomics. Individuals often grapple with the competition of present wants and future concerns when making decisions. When the details of the terms and conditions of using a product or service are articulated in opaque language and presented as bottom page afterthought, no wonder people are so readily agreeing to policies that may jeopardize their privacy. This dynamic only fertilizes the substrate for a Prisoner’s Dilemma. The firm producing the product or service acts in their self-interest by wording the terms and conditions in complex language, virtually impermeable to lay readers. If users understood what they agreed to, they would be less apt to use these products. Concurrently, these customers believe they are acting in their self-interest by choosing not to read the terms and conditions page and simply consenting to these requirements.
Neither party (customer or service provider) creates an ideal climate for transparency. It is all too easy for the customer to witlessly use the product without knowing how the service provider is collecting, storing, or even selling their information to third-party companies. The severity of this information asymmetry intensifies when specific forms of data are subject to collection and surveillance by government agencies. As stated in United States v. Miller (1976) banking services carry no reasonable expectation of privacy. The courts could apply this similar logic to data collected by other varieties of service providers, especially when presented under the guise of exigent circumstances. Essentially this contraction exists due to the laziness of consumers and the perverse incentives of service providers.
China has become a focal point in public discourse in recent years. In the years of the Trump administration, tensions escalated (during the tariff wars), as president forty-five took China to task for economic policies that undermined American interests. Internationally, China has garnered negative press for a laundry list of human rights violations, one particularly egregious example being the genocidal policies targeting the Chinese Uyghur. On the world stage, China’s reputation, sullied by ghastly optics. What can the manufacturing giant and Asian Tiger do about the mounting number of public relations quagmires?
Despite the superficial impression of a Sino-Russian alliance; officials in Beijing refuted that the nations were allies in the wake of Putin invading Ukraine. China even opts to provide humanitarian aid to Ukraine; it would be spurious to claim that this diplomatic gesture is purely altruistic reasons. When Chinese Foreign Minister Wang YI repudiates prior claims of a broken alliance by stating that Sino-Russian relations were “rock solid”. What variety of four-dimensional chess are Chinese officials attempting to play regarding the Ukraine situation? Certainly, some form of non-monetary rent-seeking on the part of China. It is reasonable to examine whether Bootleggers and Baptists (1983) coalition dynamics are applicable.
The prospect of China concurrently acting as a moralizing agent and a beneficiary (Dual-Role Actor) is mildly tenable but unlikely. It is more probable that China does not have any genuine compassion for the Ukrainian people and sees them as a strategic pawn for fostering a positive public image. If this is the case, China would not be a Dual-Role Actor, but a Covert Baptist (p.190). The nation acts in a moral capacity purely for its own ends. Potentially, doing so to smooth over the bad press engendered by their extensive list of human rights violations. This possibility seems unlikely. For years the international perception has carried much weight with Chinese officials. It is more likely that China is attempting to distance itself from Russia for the sake of self-preservation. China is trying to navigate the murky waters of retaining its diplomatic relationship with Russia without being placed in the cross-hairs. This is a precarious position to be in, especially when your prominent trading partners are the western nations placing sanctions against one of your strategic allies.
(Click link here)
As economist Thomas Schelling astutely points out in his paper Egonomics or the Art of Self-Management (1978), people are often conflicted in their decision-making by current satisfaction and long-term goals. Since these goals are contrary, it is almost like two different people exist within the same person, the present and future version of ourselves. Both variants of the same person have stratified along a temporal chain of life events influencing the current decision-maker. The current version of ourselves can only anticipate but not fully know what our future self would prefer. We can only do the best we can to contend with potential future wants and current desires.
Since we are navigating the clashing wants and needs of our future versions of ourselves with our current self, this seems to resemble an intrapersonal collective action problem. Traditionally economists have viewed collective action problems in the context of political decision-making. An individual is vying between current wants and future goals; in their decision-making, there is a potential for both sets of objectives to be at odds. A person is then susceptible to be indecisive or making concessions that find a middle ground (intrapersonal logrolling) between current and future aspirations.Clark, Peter. (2021). The Intrapersonal Collective Action Problem
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.
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.
The game-theoretical concept of focal points is not limited to merely military operations or talking points in public policy. Since focal points are context contingent, these unspoken points of convergence can be found in a multitude of different environments. Not to mention also in a plethora of various applications. An often-overlooked arena for Schelling points would be product marketing and labeling. Frequently, there are context-specific indicators of quality specified in product advertising and labeling that denote quality. Generally manifesting themselves in the forms of descriptions, categorical labels, and even lists of awards/certifications exalting the product’s superior safety or quality. All are designed to communicate that the product is of a certain caliber in the absence of additional information. Indicators that signal product quality without the consumer having to read a litany of reviews or conduct further research.
The unspoken barometer of product quality is often esoterically buried in the product labels. This is particularly true for luxury products. The term “esoteric” is applied to the interpretation of the product descriptor from the point of view of the uninitiated. For example, a novice scotch drinker may reach for a bottle off of the liquor store shelf that reads “Single malt Whisky”. An individual new to imbibing Scottish whisky may not know what this foreign phrase signifies. However, a seasoned consumer not only understands what this phrasing means. But he may also view these terms as a designation of a quality whisky. Even if this experienced whisky consumer has never heard of the brand or distillery producing the beverage. Nor have they read or watched any reviews assessing the product’s quality. Essentially making this designation on the label a context-specific point of convergence. Despite the product quality not being directly communicated.
When it comes to top-shelf liquor these subtle indicators are not limited to bottles of whisky. Prized bottles of cognac, rum, vodka, etc. all possess understated markers of quality on the label. One salient example of this would be on tequila labels. A quick rule of thumb,if you are ever looking for a bottle of tequila make the label states “100 % Blue Agave”. What does this mysterious designation mean? This classification indicates that tequila is made from blue agave. Agave is the primary sugar base distilled to make tequila. When a tequila fails to meet these requirements is referred to as being “mixto”. Virtually no tequila that meets this categorical definition proudly adorns this designation on its label. By legal definition a tequila that is “mixto” must contain 51 % blue agave liquor, the rest of the constituents generally include low-cost fillers. Some examples of these adjunct ingredients include “…caramel color, oak extract flavoring, glycerin, and sugar-based syrup…”. Typically resulting in poor tasting and overall inferior tequila. One prevalent tequila fitting this category of this distilled beverage would be the infamous Jose Cuervo.
The seminal Supreme Court case Roe V. Wade (1973) is a textbook example of a game-theoretical focal point. Why? Roe like many other Supreme Court rulings operates as an unspoken point of convergence in public policy. Ideally, such decisions made by the high courts should clarify the existing laws. In theory, the application of the law is the attempt to apply static statutes to dynamic circumstances. Generating ample opportunities for ambiguity and other categories of confusion regarding the administration of law. These cases generally serve as centering fixtures of public policy debates. After all, there are typically steep penalties for violating the law. If a law is flawed or otherwise unjust it can be amended or repealed, providing use revisions have gone through the proper channels. Making such court decisions a common destination of all pundits regardless of their stance on abortion. Endowing this infamous court decision with all of the unique characteristics of a focal point. No formal coordination or communication is required to reference this court case in the abortion debate, for decades it has been the centerpiece of all the contemptuous verbal sparring matches.
In many regards, Roe is unique even from the standpoint of being a Schellingian focal point. Even individuals lacking the proper understanding and context of the legal and normative arguments if the debate knows the case. Maybe not a bit of the factual or legal details of the case, but they know it by name. It is long been know as being synonymous with the legal justification for abortion. Many pro-choice and pro-life advocates use this case as a springboard to crafting normative positions either defending or repudiating the legality of this controversial procedure. Oddly enough, most of these talking points craft from a superficial understanding of the case has little to no legal substance, it degenerates into an ethical debate. Ethical justifications are also important but signify a conflation between normative and positive arguments. This an all too common occurrence in just about any political debate, the confusion between hard facts and ethics. Despite the common misconceptions regarding the abortion debate, without any formal coordination, even the arm-chair pundit looks towards Roe for the basis of their arguments.
Even people who are not interested in nor have an invested interest in the abortion debate, colloquially know Roe as the “abortion case”. Demonstrating how culturally in the United States this one Supreme Court decision from the 1970s has taken on a life of its own. Whether its legal significance is overblown is almost immaterial, but a matter to be debated among proper jurists. The significance or the salience of the focal point is culturally constructed. This isn’t to say that the moral arguments surrounding the debate are subjective. Rather, points of reference are most certainly subjective, but what makes them centralized or significant is a consensus of its importance. There is certainly a democratization effect that takes place in the establishment of culturally relevant focal points. The actual importance of the case is not nearly important as its perceived significance. A lot of Roe cultural clout was most likely sustained due to the decision being sandwiched between the cultural liberalization of the 1960s and the nascent period of feminism. It’s difficult to surmise if this ruling was made at a different point in time that it would possess the same degree of gravity. The cultural tides of the 1960s and 1970s provide the fertile substrate for such a contentious issue to be in the Supreme Court docket. These temporal and cultural aspects of the 1970s made Roe the ideal cause to be a focal point. In the decades since it has remained a consistent point of reference that also doubles as a divisive cultural event. Mirroring the same contentions of the Vietnam war and the Civil Rights movement.
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.
The abortion debate is arguably one of the most oversimplified contentious issues in all of public policy. The intricacies of navigating the legal statutes and case precedence that shapes the regulations governing the practice are oftentimes are glossed over in public discourse. This rash reductionist approach has shifted a complex topic into a simple categorical dichotomy. Easily making it a fervent “wedge issue” that has formulated many pithy platitudes and “bump-sticker slogans”. These slogans which are so pleasing to the ear could have effortless you contrived by a marketing team. All operate more like a carefully constructed marketing campaign than a multi-disciplinary analysis. This not only makes the abortion debate stale and uninspiring but highly predictable because both sides of the fence utilize an “all-or-nothing” strategy of argumentation. This is highly imprecise for a subject that is steeped in nuisance and minuscule details. Below is the list of disciplines that intersect in the abortion debate:
- Philosophy/Logic/ Ethics
- Political Science
If a pertinent area of study was neglected, I sincerely apologize. However, while not completely exhaustive, this list conveys exactly how complex the issue is. The intersection of all these vast areas of study converges on a single point, the refutation or the defense of Roe V. Wade (1972). This one case has become the quintessential Schellingian focal point in the abortion debate. Potentially providing some insight into why the debate is so one-dimensional.