El Farol Revisited

Some years ago Brian (Arthur 1994) published a seminal article on the problem of resolving the crowding conditions at his favorite local bar El Farol, in Santa Fe. The informal setting and its seating problems provided a striking metaphor for a basic coordination problem that occurs in many contexts. Arthur provided an imaginative and deep solution to an every day minor problem. A simple version is as follows: Say 100 people like to go to listen to the music, but all dislike overcrowding. They all have the same taste that indicates that they enjoy attending if there are 60 or fewer individuals, but would prefer to stay away if there is a higher number than 60 in attendance. Each individual has a large set of rules of thumb that he or she utilizes. The rules are of the variety such as do not go the bar if last time there were over 60 present; or go if the you think the trend 81, 71, 62 will continue. As long as an individual’s rule of thumb works he stays with it, when it fails another rule is tried. Arthur’s simulations showed that the mean attendance was around 60 although the numbers were in constant fluctuation.