Thomas Schelling

He was born April 14, 1921, in Oakland California, spent most of his boyhood in California,
with three years in the east and two in the Panama Canal Zone, his father being a naval officer.
He attended the University of California, Berkeley (with two years out in Chile), graduating in
economics in 1944. After a year and a half as an analyst with the U.S. Bureau of the Budget he
attended Harvard University, completing his Ph.D exams in June of 1948. Appointed a Junior
Fellow of the Society of Fellows, he took leave to join the administration of the Marshall Plan,
spending one year in Copenhagen and a year and a half in Paris, resigning his fellowship. In
November, 1950, he joined the White House Staff of the foreign policy adviser to the President,
which in 1951 became the Office of the Director for Mutual Security, the office that managed all
foreign aid programs. He left in the fall of 1953 to join the faculty of Yale University.

Based on my research Thomas Schelling awarded the Nobel Prize in Economics because The
Nobel committee recognized Schelling for applying game theory to explain “economic
conflicts such as price wars and trade wars, as well as why some communities are more
successful than others in managing common-pool resources.”

The Nobel committee summarized Schelling’s contribution as follows: A creative application of

game theory to important social, political and economic problems. 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. (Nobel Media AB 2005)