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Thomas Schelling

Summary:
In the Washington Post, Henry Farrell writes about Schelling’s work and how it shaped the Cold War. Schelling’s contribution was to show how the two sides could think systematically about coordinating (where they had common interests) and deterring each other from unwanted actions (where they did not). This arguably gave rise to a much more stable world — the world of the Cold War — where both sides struggled with each other for dominance, but tacitly agreed on some of the rules of the game, and didn’t try to push each other too far. The Cold War was organized around deterrence, and deterrence mostly rested on Schelling’s ideas about credible threats. … The U.S. stationed a small garrison in Berlin, which was embedded deep in East German territory, and indefensible against any serious attack. As Schelling described it, these soldiers’ job was not to defend the city but to die if it were attacked. This would then trigger a large scale U.S. response, since no U.S. president could tolerate the USSR killing American soldiers and not retaliate. Hence, by the logic of credible threats, the USSR would not attack Berlin. In the New York Times, William Grimes writes that Schelling analyzed superpower negotiations in the way that he analyzed the conflicts between, say, a blackmailer and his client, a parent and a child, or management and labor.

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In the Washington Post, Henry Farrell writes about Schelling’s work and how it shaped the Cold War.

Schelling’s contribution was to show how the two sides could think systematically about coordinating (where they had common interests) and deterring each other from unwanted actions (where they did not). This arguably gave rise to a much more stable world — the world of the Cold War — where both sides struggled with each other for dominance, but tacitly agreed on some of the rules of the game, and didn’t try to push each other too far. The Cold War was organized around deterrence, and deterrence mostly rested on Schelling’s ideas about credible threats. …

The U.S. stationed a small garrison in Berlin, which was embedded deep in East German territory, and indefensible against any serious attack. As Schelling described it, these soldiers’ job was not to defend the city but to die if it were attacked. This would then trigger a large scale U.S. response, since no U.S. president could tolerate the USSR killing American soldiers and not retaliate. Hence, by the logic of credible threats, the USSR would not attack Berlin.

In the New York Times, William Grimes writes that

Schelling analyzed superpower negotiations in the way that he analyzed the conflicts between, say, a blackmailer and his client, a parent and a child, or management and labor. In each case, he wrote, “there is a mutual dependence as well as opposition,” with each side seeking out tests of strength at less than crisis levels. …

one side in a negotiation can strengthen its position by narrowing its options … He also argued that uncertain retaliation is more credible and more efficient than certain retaliation. …

“The Strategy of Conflict” introduced the concept of the focal point, often called the Schelling point, to describe a solution that people reach without benefit of communicating, relying instead on “each person’s expectation of what the other expects him to expect to be expected to do.” …

Professor Schelling moved on to other social questions that seemed to be fertile ground for game theory, notably the dynamics behind racial change in American neighborhoods.

Dirk Niepelt
Dirk Niepelt is Director of the Study Center Gerzensee and Professor at the University of Bern. A research fellow at the Centre for Economic Policy Research (CEPR, London), CESifo (Munich) research network member and member of the macroeconomic committee of the Verein für Socialpolitik, he served on the board of the Swiss Society of Economics and Statistics and was an invited professor at the University of Lausanne as well as a visiting professor at the Institute for International Economic Studies (IIES) at Stockholm University.

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