What is the role of focal points in game theory and how do they help achieve coordination?

What is the role of focal points in game theory and how do they help achieve coordination?

Focal points in game theory refer to salient or prominent solutions that players tend to choose in the absence of communication or explicit coordination. They help achieve coordination by providing a common understanding or expectation of what other players are likely to choose. Focal points act as coordination devices, allowing players to align their strategies and make decisions that are mutually beneficial. These focal points can be based on various factors such as cultural norms, past experiences, or shared knowledge, and they help reduce the complexity of decision-making in strategic interactions.