Thomas Schelling    -   Game Theory




Thomas Crombie Schelling (born 14 April 1921) is an American economist and professor of foreign policy, national security, nuclear strategy, and arms control at the School of Public Policy at University of Maryland, College Park. He is also co-faculty at the New England Complex Systems Institute. He was awarded the 2005 Nobel Memorial Prize in Economic Sciences (shared with Robert Aumann) for "having enhanced our understanding of conflict and cooperation through game-theory analysis".


Early years[edit]
Schelling was born to John M. Schelling and Zelda M. Ayres in Oakland, California. Schelling graduated from San Diego High. He received his bachelor's degree in economics from the University of California, Berkeley in 1944. He received his PhD in economics from Harvard University in 1951.

Career[edit]
He served with the Marshall Plan in Europe, the White House, and the Executive Office of the President from 1948 to 1953.[1] He wrote most of his dissertation on national income behavior working at night while in Europe. He left government to join the economics faculty at Yale University, and in 1958 he was appointed Professor of Economics at Harvard. In 1969 he joined the John F. Kennedy School of Government at Harvard University.[1]

Schelling previously taught for twenty years at Harvard's Kennedy School, where he was the Lucius N. Littauer Professor of Political Economy, as well as conducted research at International Institute for Applied Systems Analysis (IIASA), in Laxenburg, Austria, between 1994 and 1999.

In 1993 Schelling was awarded the Award for Behavior Research Relevant to the Prevention of Nuclear War from the National Academy of Sciences.[2] He also received an honorary doctorate from Yale University in 2009 as well as an honorary degree from the University of Manchester.[3]

The Strategy of Conflict (1960)[edit]
The Strategy of Conflict, which Schelling published in 1960,[4] pioneered the study of bargaining and strategic behavior in what Schelling refers to as "conflict behavior". It is considered one of the hundred books that have been most influential in the West since 1945.[5] In this book he introduced concepts like focal point and credible commitment. Chapter headings include "A Reorientation of Game Theory," "Randomization of Promises and Threats," and "Surprise Attack: A Study of Mutual Distrust."

In an article celebrating Schelling's Nobel Memorial Prize for Economics,[6] Michael Kinsley, Washington Post op‑ed columnist and one of Shelling's former students, anecdotally summarizes Schelling's reorientation of game theory thus: "[Y]ou're standing at the edge of a cliff, chained by the ankle to someone else. You'll be released, and one of you will get a large prize, as soon as the other gives in. How do you persuade the other guy to give in, when the only method at your disposal – threatening to push him off the cliff – would doom you both? Answer: You start dancing, closer and closer to the edge. That way, you don't have to convince him that you would do something totally irrational: plunge him and yourself off the cliff. You just have to convince him that you are prepared to take a higher risk than he is of accidentally falling off the cliff. If you can do that, you win."

Arms and Influence (1966)[edit]
Schelling's theories about war were extended in Arms and Influence, published in 1966.[7] The blurb states that it "carries forward the analysis so brilliantly begun in his earlier The Strategy of Conflict (1960) and Strategy and Arms Control (with Morton Halperin, 1961), and makes a significant contribution to the growing literature on modern war and diplomacy". Chapter headings include The Diplomacy of Violence, The Diplomacy of Ultimate Survival and The Dynamics of Mutual Alarm.

Micromotives and Macrobehavior[edit]
In 1969 and 1971, Schelling published widely cited articles dealing with racial dynamics and what he termed "a general theory of tipping".[8] In these papers he showed that a preference that one's neighbors be of the same color, or even a preference for a mixture "up to some limit", could lead to total segregation, thus arguing that motives, malicious or not, were indistinguishable as to explaining the phenomenon of complete local separation of distinct groups. He used coins on graph paper to demonstrate his theory by placing pennies and dimes in different patterns on the "board" and then moving them one by one if they were in an "unhappy" situation.

Schelling's dynamics has been cited as a way of explaining variations that are found in what are regarded as meaningful differences – gender, age, race, ethnicity, language, sexual preference, and religion. Once a cycle of such change has begun, it may have a self-sustaining momentum. His 1978 book Micromotives and Macrobehavior expanded on and generalized these themes[9] and is standardly cited in the literature of agent-based computational economics.

Global warming[edit]
Schelling has been involved in the global warming debate since chairing a commission for President Jimmy Carter in 1980. He believes climate change poses a serious threat to developing nations, but that the threat to the United States has been exaggerated. Drawing on his experience with the Marshall Plan after World War II, he has argued that addressing global warming is a bargaining problem; if the world is able to reduce emissions, poor countries will receive most of the benefits but rich countries will bear most of the costs.

Contributions to popular culture[edit]
Stanley Kubrick read an article Schelling wrote that included a description of the Peter George novel Red Alert, and conversations between Kubrick, Schelling, and George eventually led to the 1964 movie Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb.[10]

Schelling is also cited for the first known use of the phrase collateral damage in his May 1961 article entitled Dispersal, Deterrence, and Damage [11]

Personal life[edit]
Schelling was married to Corinne Tigay Saposs from 1947 to 1991, with whom he had four sons. His marriage to second wife, Alice M. Coleman occurred later in 1991.[12]