Who Was Thomas C. Schelling?

Thomas C. Schelling was an economist who won the 2005 Nobel Memorial Prize in Economics, along with Robert J. Aumann, for his research on conflict and cooperation via game theory. His research has been used in conflict resolution and war avoidance. Many of his research interests have been related to national security, energy and environmental policy, and ethical issues in public policy and business. Schelling died on Dec. 13, 2016.

Key Takeaways

  • Thomas Schelling was an economist and game theorist who was awarded the Nobel Prize in Economics in 2005.
  • Schelling's work in game theory has seen wide application outside of strictly economics.
  • His theories are noted for their use in military and diplomatic strategy, arms control, social and demographic trends, and personal behavior and self-improvement.

Life and Career

Thomas Crombie Schelling was born in California on April 14, 1921. He graduated from San Diego High School and went on to attend the University of California, Berkeley, where he graduated with a degree in economics in 1944. After spending a year and a half with the U.S. Bureau of the Budget, he enrolled at Harvard University and completed the Ph.D. program in 1948.

Schelling held several professional positions during his career, all of which aided his theoretical contributions to economics. After completing his studies at Harvard, he joined the team in charge of administering the Marshall Plan, a U.S.-backed plan to rebuild Europe following World War II. He joined the White House staff of the foreign policy advisor to the President in 1950, which later became the Office of the Director for Mutual Security. In 1953, Schelling left that position to join the faculty at Yale University. In 1956, he joined the RAND Corporation. He later taught at both Harvard and the University of Maryland School of Public Policy.

Contributions

Schelling is best known for his work in game theory. He wrote many books and articles on the studies and theories of strategic behavior, or anticipating the behavior of others, and their application to geopolitical and social phenomena. Notably, Schelling was known for not relying on esoteric, formal, mathematical proofs of his theories, but on a style of clear, explanatory narrative and concrete illustration. 

Strategy and Conflict

In 1960, he wrote The Strategy of Conflict, which studied what Schelling referred to as "conflict behavior." In this book he differentiates between pure conflict, where the parties are implacably opposed, and normal conflict, where opportunities exist and can and should be acted upon by the otherwise opposed parties. The book also introduced far-reaching concepts like the "focal point," which is also known as the Schelling point, and refers to a solution reached by non-communicating parties in a negotiation based on each party's expectation of what the other party will do. Schelling also explored pre-commitment strategies, in which a party can improve its position by voluntarily implementing binding limitations on its own actions. The theories and ideas in The Strategy of Conflict and related books, Strategy and Arms Control and Arms and Influence, have been highly influential in international diplomacy and conflict, including the Cold War between the U.S. and the U.S.S.R.

Tipping Points

He wrote a series of papers, which were later published as the book Micromotives and Macrobehavior in 1978, regarding the dynamics of racial change in American neighborhoods. These works produced the now ubiquitous term "tipping point," which, in economics, refers to the point around which a small change in individual behavior or preferences can lead an entire group to adopt a previously unusual or rare practice. In Schelling's works, he described how even relatively weak individual preferences for people to live near others like themselves can lead to notable aggregate outcomes, such as white flight from urban areas as minority populations became more prevalent. Schelling's works have been influential in these and many other fields of economic research.