- by Simon Harris
- May 7, 2023
- 2 mins
I had not heard of the term until today—which seems extraordinary given a large part of my career has been dealing with the kinds of problems caused by exactly this. It’s incentives; always incentives!
Schelling points are the default solutions that people arrive at if they can’t communicate. The prisoner’s dilemma is an example of a Schelling trap, where the lack of communication means that individuals are incentivized to betray each other even though they’d be better off if they both stayed silent.
Breaking free requires a mutual and simultaneous deviation from the status quo. If we break out but others do not, then we’ll be less effective than they are.
As the size of an organization grows and its structure becomes more complicated, the complexity of communication, coordination, and incentives increases. This leads to the emergence of whatever default is expedient.
a company that maintains redundant, uncommunicative, and siloed departments working on similar projects. Each department thinks their work is unique and vital. They are unaware of the duplicative or misaligned work from the other departments.
Breaking free from this Schelling trap requires a coordinated effort from higher-level management. However, higher-level management may itself be caught in its own Schelling traps, leaving the organization unresponsive to the inefficiency.
It’s tempting to believe that at a sufficiently senior level of management these problems can be easily solved.