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Schelling's Game Theory: How to Make Decisions Robert V. Dodge

Published in print: 2012 Published Online: May Publisher: Oxford University Press 2012 DOI: 10.1093/ ISBN: 9780199857203 eISBN: 9780199932597 acprof:oso/9780199857203.001.0001 Item type: book

Thomas Schelling won the Nobel Prize “for having enhanced our understanding of conflict and cooperation through game-theory analysis.” This came after he had taught a game theory and rational choice course for forty-five years at an advanced level. This book presents the concepts Schelling taught as they are useful tools for understanding decisions and consequences. Mathematics often makes game theory challenging but it is presented as something very simple in this book. Along with a summary of the material Schelling presented this book looks at problems from his course and similar less challenging questions. While considerable analysis is carried out with the basic game theory tool—the two-by-two matrix—much of the book is descriptive and rational decision-making is presented through stories and explanation. Chapter supplements are added to illuminate points presented by Schelling and two chapters are case studies for detailed analysis of strategic thinking. The story of professional basketball coach Phil Jackson concerns the conflict between self-interest and group interest of star players in a multi-person form of the prisoner's dilemma. The second study illustrates the most dangerous decision-making moment in history, the Cuban missile crisis. This book is based on Thomas Schelling's course, which has provided guidance and insight to a great number of people around the world in academic and leadership positions.

Thomas Schelling and His Signature Course on Strategic Thinking ROBERT V. DODGE

in Schelling's Game Theory: How to Make Decisions Published in print: 2012 Published Online: May Publisher: Oxford University Press 2012 DOI: 10.1093/ ISBN: 9780199857203 eISBN: 9780199932597 acprof:oso/9780199857203.003.0001 Page 1 of 6

Item type: chapter

This chapter presents a brief summary of Schelling's career with tributes, taking him from NATO, to Washington and then the beginning of his academic career at Yale. From Yale he headed to the RAND Corporation, where he became involved with military strategy and game theory. In 1960 he moved to Harvard and completed The Strategy of Conflict, developed the strategy of MAD, advised President Kennedy during the Berlin Crisis of 1961, and developed war games to train government officials in crisis management, including Henry Kissinger and Bobby Kennedy. When he began teaching he created a course based on his experiences with bargaining and strategy, calling it “Conflict, Cooperation, and Strategy.” The course involved mixing strategic analysis with game theory and rational choice, and forms the basis of this book. Steven Levitt, co-author of Freakonomics and Superfreakonomics writes about his memories as a student on this course, years ago, as a supplement.

The Roots of ABMS

Michael J. North and Charles M. Macal in Managing Business Complexity: Discovering Strategic Solutions with AgentBased Modeling and Simulation Published in print: 2007 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780195172119 eISBN: 9780199789894 acprof:oso/9780195172119.003.0004 Item type: chapter

This chapter presents the history of agent-based modeling and simulation (ABMS) including John Conway's “Game of Life”, Thomas Schelling's housing segregation model, and John Holland's seven features of complex adaptive systems. It also discusses how ABMS is related to important neighboring fields of knowledge and technology such as multiagent systems, management science, operations research, and network science.

The Conventions of a Human Language Daniel Cloud

in The Domestication of Language: Cultural Evolution and the Uniqueness of the Human Animal Published in print: 2014 Published Online: Publisher: Columbia University Press November 2015 DOI: 10.7312/ ISBN: 9780231167925 eISBN: 9780231538282 columbia/9780231167925.003.0002 Item type: chapter

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This chapter examines David Lewis' book Convention, which was an explicit response to W. V. Quine's “Truth by Convention” as well as other things he wrote on the so-called conventions of our language and their relationship to analytic truth. Drawing on Thomas Schelling's ideas about “focal points” in “coordination games”, Lewis sought to understand conventions in general, and linguistic conventions in particular, as basically being conserved equilibriums in coordination games, built around established precedents. This allows the conventions to be tacit, while making our choice to follow them still a fully rational one. We often choose to follow the practices we see others following because it makes practical sense for us to do so, but we do not need a written account of the whole system of rules or any overarching rationale to make that rational choice. We just have to be able to figure out what is expected of us in particular situations well enough to be able to produce the right behavior most of the time.

Knowledge and Coordination: A Liberal Interpretation Daniel B. Klein

Published in print: 2014 Published Online: April Publisher: Oxford University Press 2015 DOI: 10.1093/ ISBN: 9780199355327 eISBN: 9780190261313 acprof:osobl/9780199355327.001.0001 Item type: book

Adam Smith and Friedrich Hayek saw the liberty principle as focal and accorded it strong presumption, but their wisdom invokes how little we can know. This book re-examines the elements of economic liberalism. It interprets Hayek’s notion of spontaneous order from the aestheticized perspective of a Smithian spectator, real or imagined. The book addresses issues that economists have had surrounding the notion of coordination by distinguishing the concatenate coordination of Hayek, Ronald Coase, and Michael Polanyi from the mutual coordination of Thomas Schelling and game theory. Clarifying the meaning of cooperation, it resolves debates over whether entrepreneurial innovation enhances or upsets coordination, and thus interprets entrepreneurship in terms of discovery or new knowledge. Beyond information, knowledge entails interpretation and judgment, emergent from tacit reaches of the “society of mind,” itself embedded in actual society. Rejecting homo economicus in favor of the “deepself,” the book offers a distinctive formulation of knowledge economics, entailing asymmetric interpretation, judgment, entrepreneurship, error, and correction-and kinds of discovery-which all serve the cause of liberty. The book highlights the recurring connections to underlying purposes and sensibilities, of analysts as well as agents. Behind economic talk of market communication and social error and correction lies the book’s Smithian allegory, with the allegorical spectator representing a Page 3 of 6

conception of the social. Knowledge and Coordination instructs us to declare such allegory.

Four Responses: Kavka, Kamm, Scanlon, and Schelling Iwao Hirose

in Moral Aggregation Published in print: 2014 Published Online: Publisher: Oxford University Press November 2014 DOI: 10.1093/ ISBN: 9780199933686 eISBN: 9780199398324 acprof:oso/9780199933686.003.0007 Item type: chapter

This chapter surveys four representative responses in favour of saving the greater number of individuals in the Rescue Case. Section 7.2 assesses Gregory Kavka’s reductio argument, and argues that his argument rests on the assumption, which Taurek rejects. Section 7.3 considers what has become known as the Kamm–Scanlon argument, and posits that this argument can be used to reject the case for saving the number of individuals, although it is supposed to establish it. Section 7.4 examines Frances Kamm’s Argument for Best Outcomes. Her argument is a successful non-aggregative case for saving the greater number, although it must appeal to the consequentialist reasoning. Section 7.5 considers Thomas Schelling’s probabilistic argument, and argues that it is based on a presuppositional failure.

Thomas C. Schelling

Roger W. Spencer and David A. Macpherson in Lives of the Laureates: Twenty-three Nobel Economists Published in print: 2014 Published Online: May Publisher: The MIT Press 2015 DOI: 10.7551/ ISBN: 9780262027960 eISBN: 9780262325868 mitpress/9780262027960.003.0018 Item type: chapter

This chapter examines Thomas C. Schelling's career. Schelling received a Nobel Prize in 2005. He was born in 1921 and earned a Ph.D. in economics from Harvard. He worked as professor of economics at Yale and Harvard, and later served as a distinguished university professor, emeritus, at the University of Maryland. Schelling was involved in the design and negotiation of the European Payments Union of the Marshall Plan countries. While at Yale, he wrote a modern textbook about strategic trade controls, looking at foreign aid, national security trade controls, and economic integration. Schelling is widely known through his use of game theory to analyze interactions between

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adversaries. His books include Micromotives and Macrobehavior, Choice and Consequence, and Strategies of Commitment and Other Essays.

Preemption, Prevention, and Predation: Why the Bush Strategy is Dangerous* Henry Shue

in Fighting Hurt: Rule and Exception in Torture and War Published in print: 2016 Published Online: Publisher: Oxford University Press March 2016 DOI: 10.1093/ ISBN: 9780198767626 eISBN: 9780191821486 acprof:oso/9780198767626.003.0010 Item type: chapter

Like intervention, preventive war is another possible exception to the UN Charter prohibition of all war except defence against prior attack. 'Preemption' against an attack that is imminent is not preventive war and is widely accepted, but what the Bush Administration deceptively labelled ‘preemption is a doctrine of preventive war to eliminate weapons of mass destruction (WMD). Thomas Schelling famously demonstrated that the vicious circle of reciprocal fear of surprise attack created by the permissibility of preventive war makes the world far more dangerous. Although predatory terrorists will attack irrespective of whether they are threatened with attack, a policy that defines its enemies as sloppily and broadly as the Bush doctrine creates unnecessary enemies and thereby endangers the US.

Joy and the Matrix of Concatenate and Mutual Daniel B. Klein

in Knowledge and Coordination: A Liberal Interpretation Published in print: 2014 Published Online: April Publisher: Oxford University Press 2015 DOI: 10.1093/ ISBN: 9780199355327 eISBN: 9780190261313 acprof:osobl/9780199355327.003.0005 Item type: chapter

This chapter provides a taxonomy concerning social order and well-being. It distinguishes between “spontaneous order”, which is associated with Adam Smith, Friedrich Hayek, and Michael Polanyi, and “emergent conventions”, which is associated with Carl Menger, Thomas Schelling, and other path-dependence theorists. Polanyi used the term “spontaneous order” in a consistent way to mean polycentric order or an undesigned concatenation of affairs. Hayek uses it the same way as Polanyi, but applies it to indicate the order brought about by the mutual adjustment of many individual economies in a market, called catallaxy and other undersigned concatenations of social activities. Page 5 of 6

Preemptive War* Henry Shue

in Fighting Hurt: Rule and Exception in Torture and War Published in print: 2016 Published Online: Publisher: Oxford University Press March 2016 DOI: 10.1093/ ISBN: 9780198767626 eISBN: 9780191821486 acprof:oso/9780198767626.003.0012 Item type: chapter

Thanks to the misuse of language by the Bush Administration, many people now use ‘preemptive war’ to mean preventive war. The assumption that often underlies preventive war, that war is coming anyway, is frequently false; and war is fought needlessly. Americans specifically have historically considered preventive war incompatible with their identity. S. A. Silverstone suggests that the explanation of why preventive attacks seem more appealing today is that the international norm prohibiting preventive war is now being trumped by the newly emergent prohibition against nuclear proliferation, justifying preventive attacks against weapons of mass destruction (WMD). Such a practice could be safe only if it does not lead to the generalized reciprocal fear of surprise attack warned against by Thomas Schelling.

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