Thomas Schelling

Last updated

Thomas Schelling
Thomas Schelling.jpg
Schelling in 2007
Born
Thomas Crombie Schelling

(1921-04-14)April 14, 1921
DiedDecember 13, 2016(2016-12-13) (aged 95)
NationalityAmerican
Institution Yale University
Harvard University
University of Maryland
New England Complex Systems Institute
Field Game theory
Alma mater University of California, Berkeley
Harvard University
Doctoral
advisor
Arthur Smithies
Wassily Leontief
James Duesenberry
Doctoral
students
A. Michael Spence [1]
Eli Noam [2]
Influences Carl von Clausewitz, Niccolò Machiavelli
Contributions Focal point
Egonomics
Awards The Frank E. Seidman Distinguished Award in Political Economy (1977) Nobel Memorial Prize in Economic Sciences (2005)
Information at IDEAS / RePEc

Thomas Crombie Schelling (April 14, 1921 – December 13, 2016) was 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 was 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." [3]

Contents

Biography

Early years

Schelling was born on April 14, 1921 in Oakland, California. [3] 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

Schelling served with the Marshall Plan in Europe, the White House, and the Executive Office of the President from 1948 to 1953. [4] 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.

In 1956, "...he joined the RAND Corporation as an adjunct fellow, becoming a full-time researcher for a year after leaving Yale, and returning to adjunct status through 2002." [5] In 1958 Schelling was appointed professor of economics at Harvard. That same year, he "co-founded the Center for International Affairs, which was [later] renamed the Weatherhead Center for International Affairs." [6]

In 1969, Schelling joined Harvard's John F. Kennedy School of Government, where he was the Lucius N. Littauer Professor of Political Economy. [4] He was among the "founding fathers" of the "modern" Kennedy School, as he helped to shift the curriculum's emphasis away from administration and more toward leadership. [6]

Between 1994 and 1999, he conducted research at the International Institute for Applied Systems Analysis (IIASA), in Laxenburg, Austria.

In 1990, he left Harvard and joined the University of Maryland School of Public Policy and University of Maryland Department of Economics. [7] In 1991, he accepted the presidency of the American Economic Association, an organization of which he was also a Distinguished Fellow. [8]

In 1995, he accepted the presidency of the Eastern Economic Association. [9]

Schelling was a contributing participant of the Copenhagen Consensus. [4] [10]

Honors and awards

In 1977, Schelling received The Frank E. Seidman Distinguished Award in Political Economy.

In 1993, he was awarded the Award for Behavior Research Relevant to the Prevention of Nuclear War from the National Academy of Sciences. [11]

He received honorary doctorates from Erasmus University Rotterdam in 2003, Yale University in 2009, and RAND Graduate School of Public Analysis, as well as an honorary degree from the University of Manchester in 2010. [12] [9] [8]

He was awarded the 2005 Nobel Memorial Prize in Economic Sciences, along with Robert Aumann, for "having enhanced our understanding of conflict and cooperation through game-theory analysis." [3]

Personal life

Schelling was married to Corinne Tigay Saposs from 1947 to 1991, with whom he had four sons. Later in 1991 he married Alice M. Coleman, who brought two sons to the marriage; they became his stepsons. [13] [14]

Schelling died on December 13, 2016 in Bethesda, Maryland from complications following a hip fracture at the age of 95. [7]

Schelling's family auctioned his Nobel award medal, fetching $187,000. They donated this money to the Southern Poverty Law Center, a nonprofit that fights hate, bigotry, and advocates for civil rights through litigation. Alice Schelling said her late husband had credited Smoky the Cowhorse by Will James, the winner of the Newbery Medal in 1927, as the most influential book he had read. [15]

Notable works

The Strategy of Conflict (1960)

The Strategy of Conflict, which Schelling published in 1960, [16] pioneered the study of bargaining and strategic behavior in what he refers to as "conflict behavior." The Times Literary Supplement in 1995 ranked it as one of the hundred most influential books in the 50 years since 1945. [17] In this book Schelling introduced concepts such as the "focal point" and "credible commitment."

The strategic view toward conflict that Schelling encourages in this work is equally "rational" and "successful." [16] He believes that it cannot be based merely on one's intelligence, but must also address the "advantages" associated with a course of action. The advantages gleaned, he says, should be firmly fixed in a value system that is both "explicit" and "consistent." [16]

Conflict too has a distinct meaning. In Schelling's approach, it is not enough to defeat your opponent. Instead, one must seize opportunities to cooperate. And in most cases, there are many. Only on the rarest of occasions, in what is known as "pure conflict," he points out, will the interests of participants be implacably opposed. [16] He uses the example of "a war of complete extermination" to illustrate this phenomenon. [16]

Cooperation, where available, may take many forms, and thus could potentially involve everything from "deterrence, limited war, and disarmament" to "negotiation." [16] Indeed, it is through such actions that participants are left with less of a conflict and more of a "bargaining situation." [16] The bargaining itself is best thought of in terms of the other participant's actions, as any gains one might realize are highly dependent upon the "choices or decisions" of their opponent. [16]

Communication between parties, though, is another matter entirely. Verbal or written communication is known as "explicit," and involves such activities as "offering concessions." [16] What happens, though, when this type of communication becomes impossible or improbable? This is when something called "tacit maneuvers" become important. [16] Think of this as action-based communication. Schelling uses the example of one's occupation or evacuation of strategic territory to illustrate this latter communication method.

In an article celebrating Schelling's Nobel Memorial Prize for Economics, [18] Michael Kinsley, Washington Post op‑ed columnist and one of Schelling'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)

Schelling's theories about war were extended in Arms and Influence, published in 1966. [19] 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.

Within this work, Schelling discusses military capabilities and how they can be used as bargaining power. Instead of just considering the choices available to you on a surface level, you can think ahead to try to influence the other party to come to the conclusion you want. Specifically he mentions the actions taken by the U.S. during the Cuban and Berlin crises and how they functioned not just as preparation for war, but signals as well. For example, Schelling points out that the bombing of North Vietnam "is as much coercive as tactical" [20] . Not only was the bombing to cripple their enemies armies, but it also served to bring Vietnam to the table for negotiations. Much of this writing was influenced largely due to Schelling's personal interest in Game Theory and its application to nuclear armaments. By suggesting nuclear weapons as a deterrent instead of a solution, Schelling was able to help prevent another nuclear bombing from happening.

Micromotives and Macrobehavior (1978)

In 1969 and 1971, Schelling published widely cited articles dealing with racial dynamics and what he termed "a general theory of tipping." [21] 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 [22] [23] and is often cited in the literature of agent-based computational economics.

Global warming

Schelling was involved in the global warming debate since chairing a commission for President Jimmy Carter in 1980. He believed climate change poses a serious threat to developing nations, but that the threat to the United States was exaggerated. He wrote that,

Today, little of our gross domestic product is produced outdoors, and therefore, little is susceptible to climate. Agriculture and forestry are less than 3 percent of total output, and little else is much affected. Even if agricultural productivity declined by a third over the next half-century, the per capita GNP we might have achieved by 2050 we would still achieve in 2051. Considering that agricultural productivity in most parts of the world continues to improve (and that many crops may benefit directly from enhanced photosynthesis due to increased carbon dioxide), it is not at all certain that the net impact on agriculture will be negative or much noticed in the developed world. [24]

Drawing on his experience with the Marshall Plan after World War II, he argued that addressing global warming is a bargaining problem: if the world were able to reduce emissions, poor countries would receive most of the benefits, but rich countries would bear most of the costs.

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 . [25]

Schelling is also cited for the first known use of the phrase collateral damage in his May 1961 article Dispersal, Deterrence, and Damage. [26]

See also

Related Research Articles

Game theory is the study of mathematical models of strategic interaction among rational decision-makers. It has applications in all fields of social science, as well as in logic, systems science and computer science. Originally, it addressed zero-sum games, in which each participant's gains or losses are exactly balanced by those of the other participants. Today, game theory applies to a wide range of behavioral relations, and is now an umbrella term for the science of logical decision making in humans, animals, and computers.

Nuclear strategy development of doctrines and strategies for the production and use of nuclear weapons

Nuclear strategy involves the development of doctrines and strategies for the production and use of nuclear weapons.

John Harsanyi hungarian economist

John Charles Harsanyi was a Hungarian-American economist.

Deterrence theory military strategy during the Cold War with regard to the use of nuclear weapons

Deterrence theory is the idea that an inferior force, by virtue of the destructive power of the force's weapons, could deter a more powerful adversary, provided that this force could be protected against destruction by a surprise attack. This doctrine gained increased prominence as a military strategy during the Cold War with regard to the use of nuclear weapons and is related to, but distinct from, the concept of Mutual assured destruction, which models the preventative nature of full-scale nuclear attack that would devastate both parties in a nuclear war. Deterrence is a strategy intended to dissuade an adversary from taking an action not yet started by means of threat of reprisal, or to prevent them from doing something that another state desires. The strategy is based on the psychological concept of the same name. A credible nuclear deterrent, Bernard Brodie wrote in 1959, must be always at the ready, yet never used.

Richard Thaler American economist

Richard H. Thaler is an American economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. In 2015, Thaler was president of the American Economic Association.

Lloyd Shapley American economist and mathematician

Lloyd Stowell Shapley was an American mathematician and Nobel Prize-winning economist. He contributed to the fields of mathematical economics and especially game theory. Shapley is generally considered one of the most important contributors to the development of game theory since the work of von Neumann and Morgenstern. With Alvin E. Roth, Shapley won the 2012 Nobel Memorial Prize in Economic Sciences "for the theory of stable allocations and the practice of market design."

Omicron Delta Epsilon

Omicron Delta Epsilon is an international honor society in the field of economics, formed from the merger of Omicron Delta Gamma and Omicron Chi Epsilon, in 1963. Its board of trustees includes well-known economists such as Robert Lucas, Richard Thaler, and Robert Solow. ODE is a member of the Association of College Honor Societies; the ACHS indicates that ODE inducts approximately 4,000 collegiate members each year and has more than 100,000 living lifetime members. There are approximately 700 active ODE chapters worldwide. New members consist of undergraduate and graduate students, as well as college and university faculty; the academic achievement required to obtain membership for students can be raised by individual chapters, as well as the ability to run for office or wear honors cords during graduation. It publishes an academic journal entitled The American Economist twice each year.

In game theory, a focal point is a solution that people tend to choose by default in the absence of communication. The concept was introduced by the American economist Thomas Schelling in his book The Strategy of Conflict (1960). Schelling states that "(p)eople can often concert their intentions or expectations with others if each knows that the other is trying to do the same" in a cooperative situation, so their action would converge on a focal point which has some kind of prominence compared with the environment. However, the conspicuousness of the focal point depends on time, place and people themselves. It may not be a definite solution.

Kenneth Binmore British economist

Kenneth George "Ken" Binmore, is a British mathematician, economist, and game theorist. He is a Professor Emeritus of Economics at University College London (UCL) and a Visiting Emeritus Professor of Economics at the University of Bristol.

Christopher A. Sims American time-series statistician and econometrician, developer of vector auto-regressive models, Bayesian statistician, President of the Econometric Society, 2011 winner of the Nobel Prize

Christopher Albert "Chris" Sims is an American econometrician and macroeconomist. He is currently the John J.F. Sherrerd '52 University Professor of Economics at Princeton University. Together with Thomas Sargent, he won the Nobel Memorial Prize in Economic Sciences in 2011. The award cited their "empirical research on cause and effect in the macroeconomy".

In social dynamics, critical mass is a sufficient number of adopters of an innovation in a social system so that the rate of adoption becomes self-sustaining and creates further growth. The term is borrowed from nuclear physics and in that field it refers to the amount of a substance needed to sustain a chain reaction.

The Maryland School of Public Policy is one of 14 schools at the University of Maryland, College Park. The school is located inside the Capital Beltway and ranks 16th nationally for schools of public policy according to U.S. News & World Report (2012).

Precommitment refers to a strategy that an agent may use to restrict the number of choices available to him or her at a future time. The strategy may also involve the imposition of obstacles or additional costs to certain courses of action in advance. As theorized by the social scientist Jon Elster, an agent may precommit herself when she predicts that her preferences will change but wishes to ensure that her future actions will align with her current preferences. Precommitment has also been studied as a bargaining strategy in which agents bind themselves to one course of action in order to enhance the credibility of present threats. Some scholars have proposed that collective political agents may also engage in precommitment by adopting constitutions that limit the scope of future legislation. The validity of this application of precommitment theory has been called into question, however.

Roger Myerson American economist

Roger Bruce Myerson is an American economist and professor at the University of Chicago. He holds the title of The Glen A. Lloyd Distinguished Service Professor in Economics and the College and Harris Graduate School of Public Policy Studies. In 2007, he was the winner of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel with Leonid Hurwicz and Eric Maskin for "having laid the foundations of mechanism design theory." He was elected a Member of the American Philosophical Society in 2019.

RAND Corporation non-profit organisation in the USA

RAND Corporation is an American nonprofit global policy think tank created in 1948 by Douglas Aircraft Company to offer research and analysis to the United States Armed Forces. It is financed by the U.S. government and private endowment, corporations, universities and private individuals. The company has grown to assist other governments, international organizations, private companies and foundations, with a host of defense and non-defense issues, including healthcare. RAND aims for interdisciplinary and quantitative problem solving by translating theoretical concepts from formal economics and the physical sciences into novel applications in other areas, using applied science and operations research.

Economists for Peace and Security (EPS) is a New York-based, United Nations accredited and registered global organization and network of thought-leading economists, political scientists, and security experts founded in 1989 that promotes non-military solutions to world challenges, and more broadly, works towards freedom from fear and freedom from want for all.

The University of Maryland College of Behavioral and Social Sciences is one of the 13 schools and colleges at the University of Maryland, College Park. With 10 departments, it is one of the largest colleges at the university, with three in ten University of Maryland undergraduates receiving their degree from the college. 45 research centers also are located in the College. Its social science programs are collectively ranked 10th in the United States by the Faculty Scholarly Productivity Index, and 18th in the world by the Institute of Higher Education at Shanghai Jiao Tong University.

The William and Katherine Estes Award, previously known as the NAS Award for Behavioral Research Relevant to the Prevention of Nuclear War is awarded by the U.S. National Academy of Sciences "to recognize basic research in any field of cognitive or behavioral science that has employed rigorous formal or empirical methods, optimally a combination of these, to advance our understanding of problems or issues relating to the risk of nuclear war". It was first awarded in 1990.

Strategic delegation refers to delegation of decision-making to agents, and accompanying organizational design choices, which, under strategic interdependence, serve as commitments that influence interactions with rivals and potentially lead to beneficial outcomes for the delegating party.

References

  1. Spence, A. Michael (December 8, 2001), SIGNALING IN RETROSPECT AND THE INFORMATIONAL STRUCTURE OF MARKETS (PDF), Nobel Foundation, p. 407, retrieved June 8, 2017
  2. "Eli M. Noam". Columbia Institute for Tele-Information . Retrieved October 16, 2016.
  3. 1 2 3 "Thomas C. Schelling - Facts". www.nobelprize.org. Nobel Foundation . Retrieved December 13, 2016.
  4. 1 2 3 "Curriculum Vitae: Thomas C. Schelling". University of Maryland School of Public Policy. 2008. Archived from the original on July 3, 2007. Retrieved September 18, 2008.
  5. "Nobel Committee Honors Former RAND Economist Thomas Schelling". www.rand.org. Retrieved November 16, 2017.
  6. 1 2 "Thomas Schelling, Nobelist and game theory pioneer, 95". Harvard Gazette. December 14, 2016. Retrieved November 16, 2017.
  7. 1 2 Campbell, Megan (December 13, 2016). "In Memory of Thomas Schelling". publicpolicy.umd.edu. University of Maryland School of Public Policy . Retrieved December 13, 2016.
  8. 1 2 "Honorary Doctorate for professor Thomas C. Schelling". www.eur.nl (in Dutch). Erasmus Universiteit Rotterdam. September 29, 2014. Archived from the original on November 17, 2017. Retrieved November 16, 2017.CS1 maint: others (link)
  9. 1 2 "Thomas C. Schelling | NECSI". www.necsi.edu. Retrieved November 16, 2017.
  10. "Thomas Schelling". Copenhagen Consensus. Retrieved January 16, 2016.
  11. "NAS Award for Behavior Research Relevant to the Prevention of Nuclear War". National Academy of Sciences. Archived from the original on June 4, 2011. Retrieved February 16, 2011.
  12. "Nobel prize winner delivers SCI annual lecture".
  13. "Thomas C. Schelling". The Notable Names Database. 2008. Retrieved November 18, 2008.
  14. Uchitelle, Louis (October 11, 2005). "American and Israeli Share Nobel Prize in Economics". The New York Times. ISSN   0362-4331 . Retrieved November 16, 2017.
  15. Levin, Sala (June 8, 2018). Family of Late UMD Professor Auctions Nobel Medal to Fight Hate. http://terp.umd.edu/
  16. 1 2 3 4 5 6 7 8 9 10 Schelling, Thomas C. (1980). The Strategy of Conflict (Reprint, illustrated and revised. ed.). Harvard University Press. p. 309. ISBN   978-0-674-84031-7 . Retrieved September 21, 2010.
  17. "100 Most Influential Books Since the War (TLS)".
  18. "A Nobel Laureate Who's Got Game", The Washington Post, October 12, 2005.
  19. Yale University Press
  20. "Arms and Influence | Yale University Press". yalebooks.yale.edu. Retrieved November 14, 2019.
  21. Thomas C. Schelling (1969) "Models of segregation," American Economic Review, 1969, 59(2), 488–493.
       _____ (1971). "Dynamic Models of Segregation," Journal of Mathematical Sociology, 1(2), pp. 143–186.
  22. Thomas C. Schelling (1978) Micromotives and Macrobehavior, Norton. Description, preview.
  23. Schelling, Thomas C (2006). "Some Fun, Thirty-Five Years Ago". Handbook of Computational Economics. Elsevier. 2: 1639–1644. doi:10.1016/S1574-0021(05)02037-X. ISBN   9780444512536.
  24. Schelling, Thomas C. (2007). "Greenhouse Effect". In Henderson, David R. (ed.). Concise Encyclopedia of Economics (1st ed.). Library of Economics and Liberty. Retrieved December 7, 2017.
  25. Thomas C. Schelling, 2006 prologue to 'Meteors, Mischief, and War', in Strategies of commitment and other essays, Harvard University Press, 2006.
  26. Schelling, T. C. (1961). "INFORMS PubsOnline". Operations Research. 9 (3): 363–370. doi:10.1287/opre.9.3.363.
Awards
Preceded by
Finn E. Kydland
Edward C. Prescott
Laureate of the Nobel Memorial Prize in Economics
2005
Served alongside: Robert Aumann
Succeeded by
Edmund Phelps