What is the 'El Farol Bar problem' in game theory?

This refers to a logical puzzle that asks how the people in a town, without any communication, can optimally choose whether to go to a small bar with limited seats on a Thursday night. If all people in the town decide to go the bar on the same night, it would cause overcrowding and make them all worse off. In such a case, they would all be better off staying home during the night. American economist William Brian Arthur is credited with developing the problem in 1994 based on earlier work conducted by B.A. Huberman and Tad Hogg. The problem is named after the El Farol Bar in Santa Fe, New Mexico, U.S.