The Strategy of Conflict
Thomas Schelling, 1960
Two trucks loaded with dynamite meet on a road too narrow to pass. Who will back down? Nobel laureate Thomas Schelling shows that the outcome of such disputes is decided by expectations: people reach agreements without words, weakness turns into strength, and a threat works better when even the one who makes it does not know how it will end. You will see why armies stop at rivers, and why two people who do not want a fight can still start one.
Who it is for
For people who want to understand how disputes, bargaining and standoffs work, from a talk about a price to the Cold War. And for those who have noticed that the strongest side does not always win a conflict, and want to know why.
The power to hold an opponent back may depend on the ability to tie yourself down; in bargaining, weakness is often a strength.
Two trucks on a narrow road
Picture a narrow mountain road on which two vehicles cannot pass. Two trucks are crawling towards each other, and both are loaded with dynamite. One of them has to reverse. Each driver wants the other to give way, but nobody wants a collision. The Nobel Committee uses this picture as one of Thomas Schelling's characteristic examples: in his view, this is what bargaining looks like even when nobody says a word.
Schelling was an economist. After the war he spent five years in Europe and Washington on talks about aid and military supplies. That was the Marshall Plan, and there he saw again and again how the sides pressed on each other. In 1960 he gathered his articles into the book “The Strategy of Conflict”. The times were anxious: an arms race was under way, and the question of how rivals could avoid destroying each other was far from theoretical. In 2005 Schelling shared the Nobel Prize in Economics with Robert Aumann for work in which game theory helped to explain both conflict and cooperation.
The book's main idea sounds strange only at first. In almost any dispute the interests of the sides are not completely opposed: each wants to get more, but both need an outcome better than catastrophe. Conflicts like chess, where one side's win is exactly the other's loss, are rare. Much more often a conflict resembles bargaining, and in such bargaining the strongest side does not always win. Sometimes the winner is the one who has less freedom to back away.
You will see how people reach agreement without saying a word to each other. You will learn why armies stop at rivers and why one burns the bridges behind oneself. You will see why a kidnapper finds it hard to believe a captive, how a threat works when even the one who makes it does not know its outcome, and why two people who do not want a fight can still start one. Schelling's examples come from war and diplomacy, but he wrote that the same rules can be seen in a family, at work and even in a traffic jam. We begin with the most peaceful puzzle.
Noon at Grand Central
Schelling set his students a simple problem. You have to meet a person tomorrow in New York. You have not agreed on a place or a time, and you cannot contact each other. Where will you go, and at what time? Most students gave the same answer: at noon, by the information desk at Grand Central Terminal.
Logic is powerless here: in a huge city there are thousands of places, and none is better than the others. Yet people converged. Schelling repeated the experiment with other questions. Name “heads” or “tails” and you win if your partner names the same thing: most chose heads. Name any positive number: most often people named one. Two people are asked to divide a hundred dollars, each writes down their share, and if the total is not more than a hundred, both get what they wrote. Almost everyone wrote fifty.
Schelling has a name for such an answer: the focal point. It is an option that stands out from the rest: it is the only one, the simplest, the most familiar or the most striking. What matters is not that you like it, but that the other person will notice it too and expect you to notice it. You are not looking for the best place, but for the one you both will think of, thinking about each other.
A focal point works like a lighthouse in fog. It is not necessarily the closest one; it is simply visible to everyone. Schelling stressed that such a point cannot be worked out by logic alone, just as a strict argument cannot prove that a joke is funny. Shared culture, precedent, habit and sometimes simple geometry suggest it.
What follows for you? When there is no connection and you have to guess how the other will act, ask yourself not “what is more convenient for me”, but “what is most obvious to both of us”. And where you can agree in advance, create such a point yourself: one meeting place for all occasions, one usual hour for a call. This is already an application of the idea, not advice from the book, but it rests on Schelling's observation that people converge remarkably well when they have something to hold on to.
About the author
Thomas Schelling (1921–2016) was an American economist. After the war he worked on the Marshall Plan, then taught at Yale and Harvard and for many years worked with the RAND Corporation. In 2005 he shared the Nobel Prize in Economics with Robert Aumann.
All books by this author: Thomas Schelling
Terms from the book
- Game theory
- Grand Central
- Commitment
- Nobel Committee: The committee of the Royal Swedish Academy of Sciences that decides the prize in economics in memory of Alfred Nobel and publishes explanations of the laureates' work.
- Marshall Plan: The American aid programme for Western Europe after the Second World War, named after the US Secretary of State George Marshall.
- Aumann: Robert Aumann, Israeli-American mathematician. He shared the 2005 Nobel Prize in Economics with Schelling for work on long, repeated relationships.
- Focal point: Schelling's concept: an option that stands out from the rest, so that people choose it without any agreement, expecting the other to choose it too. Often called a Schelling point.
- Tacit bargaining: Schelling's term for bargaining in which the sides cannot or do not want to speak directly and signal their intentions through their actions.
- 38th parallel: The latitude line along which Korea was divided into northern and southern parts in 1945. During the Korean War of 1950–1953 it served as a visible border.
- Taboo: A strict prohibition that rests not on law but on a shared belief that such an act must not be done.
- Deterrence: A strategy in which an opponent is held back from attacking by the threat of a response.
- Brinkmanship: A tactic of gradually raising the risk of open clash in order to force the other side to back down.
All terms
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