RATIONALIZING FOCAL POINTS

摘要

Focal points seem to be important in helping players coordinate their strategies in coordination problems. Game theory lacks, however, a formal theory of focal points. This paper proposes a theory of focal points that is based on individual rationality considerations. The two principles upon which the theory rest are the Principle of Insufficient Reason (IR) and a Principle of Individual Team Member Rationality. The way IR is modelled combines the classic notion Of description symmetry and a new notion of pay-off symmetry, which yields Different predictions in a variety of games. The theory can explain why people do Better than pure randomiztion in matching games.