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Game Theory: Schelling Points
A Schelling point, named after Thomas Schelling who originated the idea, is a "solution" or outcome of a game chosen because of its uniqueness. It depends greatly on the outlooks and values of the players, since it must seem unique to these participants. If you and a friend get separated in a large supermarket, often you can find each other by guessing where the other will try to find you. In the same way, we can often come up with solutions to games by noting some interesting solution that others will also see.
Consider now two players playing the game called bilateral monopoly. They have a dollar to divide between them, provided they can agree how to divide it. Superficially there is no resemblance between this game and that discussed above; the players are free to talk with each other as much as they want.
But while they can talk freely, there is a sense in which they cannot communicate at all. It is in my interest to persuade you that I will only be satisfied with a large fraction of the dollar; if I am really unwilling to accept anything less than ninety cents, you are better off agreeing to accept ten cents than holding out for more and getting nothing. Since it is in the interest of each of us to persuade the other of his resolve, all statements to that effect can be ignored; they would be made whether true or not. What each player has to do is to guess what the other's real demand is, what the fraction of the dollar is without which he will refuse to agree. That cannot be communicated, simply because it pays each player to lie about it. The situation is therefore similar to that in the previous game; the players must coordinate their demands (so that they add up to a dollar) without communication. It seems likely that they will do so by agreeing to split the dollar fifty-fifty. - David Friedman, A Positive Account of Property Rights
In the same way, the "law of equal freedom" might be derived. While unequal "distributions" of freedom might be proposed by some ("you must be my slave on Thursdays"), most would see a dangerous slippery slope in such arrangements, reasoning that if they give in on that much, what's to stop further similar demands in the future. Similarly, other rights are derived: I have a right to my property and you to yours, I can speak my mind and you speak yours, and so on. Furthermore, once these rights/solutions are established by convention and well-known, the Schelling point is further reinforced. Thus, rights can be seen as a Schelling point in a Hobbesian game.
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