Thomas Schelling - American economist, Nobel laureate

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:55

Thomas Schelling is a famous American economist who received the Nobel Prize in Economics in 2005. The award was given to him for his deep study of conflict and cooperation using game theory. Worked at the University of Maryland.

Economist biography

Thomas Schelling was born in Oakland, California. He was born in 1921. He received his higher education at once at several leading universities in the country: first, a bachelor's degree from California, and then a doctorate in economics from Harvard.

Thomas Schelling began his career in government organizations. Immediately after the Second World War, it was the Federal Budget Office, then - the bureau for the implementation of the famous Marshall Plan. In it, he worked under the American diplomat William Harriman in Copenhagen and Paris. When Harriman became US Secretary of Commerce, Schelling, under his patronage, went to work as an expert on international trade in the White House apparatus. He held this post from 1951 to 1953.

When in 1953 Washington changedpresidential administration, he lost his post and concentrated on a career as a professional economist. At this time, he becomes a professor at Yale University. He has been working there for five years and begins developing his first economic theories.

From Yale University, Schelling moved to Harvard in 1958. This becomes his alma mater, where he works until 1990.

Helping the US government

Thomas Schelling, after leaving his job at the White House, continues to advise the US government on economic issues. For example, he takes part in the work of the so-called "think tanks", one of which was created in 1969 at the John F. Kennedy School of Government at Harvard University.

In 1971 he won the Frank Seidman Prize, which was awarded to scientists for contributions to the political economy that have led to an improvement in the welfare of mankind.

In 1991, Schelling became president of the US Economic Association, by which time already a Nobel Prize winner in economics. In addition, he was a professor of political science and economics at the University of Maryland, as well as a professor emeritus of political economy at Harvard.

Thomas Schelling passed away in 2016 at the age of 95.

Scientist's work

For Schelling, as for many institutionalists of his generation, it was important to study thematicallyvaried research. At the same time, there was a unifying moment in his works - this is a common methodological approach.

The hero of this article sought to study the strategic rational behavior of a person - when people strive to maximize their benefits not right now, but over a long period of time.

Schelling studied this type of behavior through game theory, and he himself is one of its founders. It was for these studies that the American economist received the Nobel Prize.

Interestingly, this is the second prize the committee has awarded for research into game theory, though it doesn't usually do that. The first laureate for research in a related field was the American mathematician John Nash. In 1994, he received the Economics Prize for his pioneering work on equilibrium analysis in non-cooperative game theory.

What do senseless actions lead to?

Schelling's book "Micromotives and macrobehavior" is of great interest. In it, the author analyzes the behavior of an individual who does not even suspect what his actions, which at first glance seem meaningless, can lead to.

Combined with the actions of other individuals, he considers micro-motives and macro-choices that lead to meaningful consequences for the largest groups.

Principles of rational interaction

Certainly, Schelling's most famous work en titled"Conflict strategy". He wrote it back in 1960. In it, the economist formulates most of the basic principles of the strategy of the most rational strategic interaction for a person.

According to Schelling, the so-called focal points begin to form between the "players" over a long period of time. So he means mutually beneficial solutions, due to knowledge of the mutual preferences of the parties.

It is important that at the same time one of the parties to the conflict is able to strengthen its position by providing credible obligations. This is strong evidence that he will continue to follow the chosen strategy, regardless of possible changes in the basic conditions.

In "Strategy of Conflict" he cites as an example the nuclear arms race, when it is beneficial for all participants to follow the concept of automatic retaliation. In this case, the objects of protection are not the cities themselves, but missile silos, which can be located outside them.

As a result, in the process of negotiations between the parties, a bluff arises, which is extremely beneficial for them to use. With its help, one of the parties significantly strengthens its position, while hiding its own awareness of the possibilities and position of the opponent. If we take the example of nuclear weapons, then in the negotiation process it can be beneficial to deliberately portray disbelief in the likelihood and desire of the enemy to automatically retaliate.

Analysis of political problems

In addition to purely economic, Schelling deeply studied the problems of modern political economy, conducting a detailed analysis of political science problems. The object of his research was strategic interactions in various areas of human behavior.

For example, when studying organized crime, he came to the conclusion that its goals mostly coincide with the main goals of human society. Its participants are also interested in minimizing murders, which can provoke increased police attention. Based on this point of view, for society, the preservation of criminal communities may be more profitable than the war against the mafia.

It is important that Schelling was one of the first to study sociocultural issues. He studied the formation of the ghetto from the point of view of the formation of territorial segregation.

Evaluations of works

Schelling's work has always been controversial. Immediately after the Nobel Prize was awarded to him, the Swedish Academy of Sciences received an open letter demanding that it be annulled, since the laureate is an accomplice in unleashing wars. Schelling was accused of preparing the theoretical basis for the US military penetration into Israel. In addition, it is believed that his ideas formed the basis of the American power strategy, which was used in Vietnam in the 60s.

At the same time, in the works of Schelling in the 50-70s, it is proved that the buildup of nuclear weapons will minimize the likelihood of any military conflict between the participants in this arms race. howonce Schelling's arguments formed the basis of America's nuclear strategy, contributing to the fact that the growth of nuclear arsenals did not lead to a global world conflict. In 1993, he was even awarded the Prize for the Prevention of Nuclear War in the year of the thirtieth anniversary of the Cuban Missile Crisis.