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.”
Schelling was born on April 14, 1921 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.
Schelling served with the Marshall Plan in Europe, the White House, and the Executive Office of the President from 1948 to 1953. 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.” 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.”
In 1969, Schelling joined Harvard’s John F. Kennedy School of Government, where he was the Lucius N. Littauer Professor of Political Economy. 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.
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. In 1991, he accepted the presidency of the American Economic Association, an organization of which he was also a Distinguished Fellow.
In 1995, he accepted the presidency of the Eastern Economic Association.
Schelling was a contributing participant of the Copenhagen Consensus.
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.
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.
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.”
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. 
Schelling died on December 13, 2016 in Bethesda, Maryland from complications following a hip fracture at the age of 95.
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.
The Strategy of Conflict (1960)
The Strategy of Conflict, which Schelling published in 1960, 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. 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.” 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.”
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. He uses the example of “a war of complete extermination” to illustrate this phenomenon.
Cooperation, where available, may take many forms, and thus could potentially involve everything from “deterrence, limited war, and disarmament” to “negotiation.” Indeed, it is through such actions that participants are left with less of a conflict and more of a “bargaining situation.” 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.
Communication between parties, though, is another matter entirely. Verbal or written communication is known as “explicit,” and involves such activities as “offering concessions.” What happens, though, when this type of communication becomes impossible or improbable? This is when something called “tacit maneuvers” become important. 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, 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. 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”. 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.” 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 and is often cited in the literature of agent-based computational economics.
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.
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.
Contributions to popular culture
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.
Schelling is also cited for the first known use of the phrase collateral damage in his May 1961 article Dispersal, Deterrence, and Damage.
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- ^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.
- ^Thomas C. Schelling (1978) Micromotives and Macrobehavior, Norton. Description, preview.
- ^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.
- ^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.
- ^Thomas C. Schelling, 2006 prologue to ‘Meteors, Mischief, and War’, in Strategies of commitment and other essays, Harvard University Press, 2006.
- ^Schelling, T. C. (1961). “INFORMS PubsOnline”. Operations Research. 9 (3): 363–370. doi:10.1287/opre.9.3.363.