Nobel Prize Winner Dr. Thomas Schelling

Dr. Thomas C. Schelling - Photo courtesy University of Maryland

Dr. Thomas C. Schelling
Photo courtesy of the University of Maryland

Dr. Thomas Schelling, recipient of the 2005 Nobel Prize in economics, had a nearly 50-year affiliation with RAND, including one year as a staff economist in the late 1950s. He received the prize "for having enhanced our understanding of conflict and cooperation through game-theory analysis" — analysis that was conducted in part while at RAND.

As the Royal Swedish Academy of Sciences noted in announcing the prizewinners, "Against the backdrop of the nuclear arms race in the late 1950s, Thomas Schelling's book The Strategy of Conflict set forth his vision of game theory as a unifying framework for the social sciences. Schelling showed that a party can strengthen its position by overtly worsening its own options, that the capability to retaliate can be more useful than the ability to resist an attack, and that uncertain retaliation is more credible and more efficient than certain retaliation. These insights have proven to be of great relevance for conflict resolution and efforts to avoid war."

The Academy continued, "Schelling's work prompted new developments in game theory and accelerated its use and application throughout the social sciences. Notably, his analysis of strategic commitments has explained a wide range of phenomena, from the competitive strategies of firms to the delegation of political decision power."

Schelling earned his PhD in economics in 1951 from Harvard University and then worked as an associate professor and full professor of economics at Yale University from 1953 until 1958. In 1956 he joined RAND as an adjunct fellow, becoming a full-time researcher for a year after leaving Yale, and returning to adjunct status through 2002. He was a professor of economics at Harvard until 1990 and is now a professor emeritus at the University of Maryland.

He has been elected to the National Academy of Sciences, the Institute of Medicine, and the American Academy of Arts and Sciences. In 1991 he was President of the American Economic Association, of which he is a Distinguished Fellow. Previous honors include the Frank E. Seidman Distinguished Award in Political Economy and the National Academy of Sciences award for Behavioral Research Relevant to the Prevention of Nuclear War.

Schelling served in the Economic Cooperation Administration in Europe during the period of the Marshall Plan and also held positions in the White House and Executive Office of the President. He has published on military strategy and arms control, energy and environmental policy, climate change, nuclear proliferation, terrorism, organized crime, foreign aid and international trade, conflict and bargaining theory, racial segregation and integration, the military draft, health policy, tobacco and drugs policy, and ethical issues in public policy and in business.

Schelling's co-laureate, Robert J. Aumann, was also an adjunct researcher at RAND for a dozen years, from 1962 to 1974. He was the first to analyze "infinitely repeated games", which helped explain why some people or communities cooperate better than others over time and co-authored several RAND papers on "non-atomic games."

RAND Publications by Thomas Schelling

For the Abandonment of Symmetry in the Theory of Cooperative Games — 1958

Thomas C. Schelling

An argument that the pure "moveless" bargaining game may not exist or, if it does, is of a different character from that generally supposed. In addition, it is argued that symmetry in the solution of bargaining games cannot be supported on the notion of "rational expectations."

Prospectus for a Reorientation of Game Theory — 1958

Thomas C. Schelling

An attempt to extend the scope of game theory, using the zero-sum game as a limiting case rather than as a point of departure.

Re-Interpretation of the Solution Concept for "Non-Cooperative" Games — 1958

Thomas C. Schelling

A discussion of coordination-game theory, suggesting that the "solution in the strict sense" of a tacit nonzero-sum game is to be understood largely by reference to its signalling qualities.

The Reciprocal Fear of Surprise Attack — 1958

Thomas C. Schelling

An analysis of the idea that initial probabilities of surprise attack become larger through a "multiplier" effect as a result of the compounding of each person's fear of what the other fears.

Randomization of Threats and Promises — 1959

Thomas C. Schelling

An investigation of randomization in non-zero-sum games. In its role of making indivisible objects divisible, or incommensurate objects homogeneous, randomization is relevant to threats and promises.

Models of Segregation — 1969

Thomas C. Schelling

Two theoretical models are developed to examine the individual incentives and perceptions of difference between people that can lead, collectively, to the segregation of various sub-populations.

A Tribute to Bernard Brodie and (Incidentally) to RAND — 1979

Thomas C. Schelling

Reviews the development of professional military strategy during the 1950s and Brodie's contribution to it.

Strategy and Self-Command — 1985

Thomas C. Schelling

Reviews strategies such as self-blackmail and fear, and technological devices such as the polygraph that are available to individuals, military units, and governments to ensure self-control.

RAND Graduate Institute Commencement Exercises, November 16, 1985 — 1986

Thomas C. Schelling

Commencement address given by Thomas C. Schelling, the Lucius N. Littauer Professor of Political Economy at Harvard University, on November 16, 1985 at the RAND Graduate Institute.

Crisis Games 27 Years Later: Plus C'est Deja Vu — 1991

Robert A. Levine, Thomas C. Schelling, William M. Jones

Five short pieces on crisis gaming written as an internal colloquy at RAND in the summer and fall of 1964 and reproduced as originally presented.

Addictive Drugs: The Cigarette Experience — 1992

Thomas C. Schelling

This article, reprinted from Science, looks at smoking behavior along with the social trend towards quitting, characteristics of cigarettes and the cigarette industry, and nicotine addiction.

Assessing Alternative Drug Control Regimes — 1996

Robert J. MacCoun, Peter Reuter, Thomas C. Schelling

The debate over alternative regimes for currently illicit psychoactive substances focuses on polar alternatives: harsh prohibition and sweeping legalization. This study presents an array of alternatives that lies between these extremes.