#game-theory #analogy Created at 2023-01-19 # [Anonymous feedback](https://www.admonymous.co/louis030195) # [[Epistemic status]] #shower-thought #human-in-the-loop Last modified date: 2023-01-19 Commit: 0 # Related - [[Mathematic/Game Theory/Equilibrium]] - [[Mathematic/Game Theory/Social choice theory/Social choice theory]] - [[Mathematic/Game Theory/Zero Sum Game]] - [[Readwise/Books/Thomas C. Schelling - The Strategy of Conflict]] - [[Philosophy/Humans/Comparative Advantage]] # TODO > [!TODO] TODO # Schelling point A Schelling point is a solution to a strategic game, developed by Nobel Prize-winning economist Thomas Schelling, which can be used to model social and economic interactions. This concept is based on the idea that when two parties cannot reach an agreement, they will often agree on a third option that is neither party's ideal choice. For example, a Schelling point may be the middle point between two different prices that two parties cannot agree on, allowing them to reach a compromise. This concept is often used to explain how people form social networks, how decisions are made in groups, and how individuals interact in economic situations. In a game of tug of war, if two teams are pulling against one another on opposite ends of a rope, they will often come to a middle point where neither team is able to pull the rope in their direction. This middle point can be thought of as a Schelling point. It is a point which neither team wants, but is better than the alternative of no agreement. If a flock of birds were to fly in a single direction, they would eventually reach a point where the birds on each side of the flock are equally far away from their destination. This point can be thought of as a Schelling point — a point of balance where the birds can neither move forward nor back. In business negotiations, two parties may not be able to agree on a price. By finding a middle point between the two prices offered, they can reach an agreement that is satisfactory to both parties. This middle point can be thought of as a Schelling point — a point of agreement that is better than the alternative of no agreement.