Results for “thomas schelling”
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Thomas Schelling on Adapting to Climate Change

Yesterday, Thomas Schelling gave a seminar on climate change here at the Center for Study of Public Choice. Schelling’s main argument was that lots of resources are going into predicting and understanding climate change but very little thought or resources are going into planning for adaptation.

If Washington, DC, Boston and Manhattan are to remain dry, for example, we are almost certainly going to need flood control efforts on the level of the Netherlands. It takes twenty years just to come up with a plan and figure out how to pay for these kinds of projects let alone to actually implement them so it’s not too early to beginning planning for adaptation even if we don’t expect to need these adaptations for another forty or fifty years. So far, however, nothing is being done. Climate deniers think planning for adaptation is a waste and many climate change proponents think planning for adaptation is giving up.

Schelling mentioned a few bold ideas. We can protect every city on the Mediterranean from Marseilles to Alexandria to Tel Aviv or we could dam the Strait of Gibraltar. Damming the strait would be the world’s largest construction project–by far–yet by letting the Mediterranean evaporate somewhat it could also generate enough hydro-electric power to replace perhaps all of the fossil fuel stations in Europe and Africa.

Schelling didn’t mention it but in the 1920s German engineer Herman Sörgel  proposed such a project calling it Atlantropa (more here). In addition to power, damming the strait would open up a huge swath of valuable land. Gene Roddenberry and Phillip K. Dick were fans but needless to say the idea never got very far. A cost-benefit analysis, however, might show that despite the difficulty, damming the strait would be cheaper than trying to save Mediterranean cities one by one. But, as Schelling argued, no one is thinking seriously about these issues.

I argued that capital depreciates so even many of our buildings, the longest-lived capital, will need to be replaced anyway. Here, for example, is a map showing the age of every building in New York City. A large fraction, though by no means all, are less than one hundred years old. If we let the areas most under threat slowly deteriorate the cost of moving inland won’t be as high as one might imagine–at least if the water rises slowly (not guaranteed!). Schelling agreed that this was the case for private structures but he doubted that we would be willing to let the White House go.

If we are going to save cities, especially buildings not yet built, should we not start taxing land today that is under threat of future flood? Act now to mitigate future moral hazard problems. John Nye and Robin Hanson raised this issue. See Robin’s post for more.

It was an enjoyable seminar. At 94, Schelling remains sharp, provocative, and in command of the facts.

Thomas Schelling’s Middle East peace plan

With Shlomo Ben-Ami and Jerome Siegal and Javier Solana:

• The U.N. Security Council (or the General Assembly if the United States does not support this approach) will establish a special committee composed of distinguished international figures acting in their own capacity. Possibly it would be headed by a former American statesman or senator.

• UNSCOP-2’s first task would be to determine if there is any possible peace agreement that would be acceptable to a majority of both the Israeli and Palestinian people.

• The committee would go to the region where, over a period of several months, it would conduct a transparent inquiry into the possibility of genuine peace.

First and foremost, it would listen to the Israelis and the Palestinians. Its hearings would be televised. It would conduct public opinion research and study the record of past Israeli-Palestinian negotiations — in particular, the Clinton Parameters and the progress made at Taba and in the Olmert-Abbas round. UNSCOP-2 would seek new ideas for resolving the most difficult issues, such as refugees.

• Assuming the committee concludes that there is sufficient popular support on both sides for a specific peace agreement, it would then develop a draft treaty which it would forward to the Security Council for further action.

• In a departure from 1947, no effort would be made to impose this treaty. Rather, the Security Council would call on Israel and the Palestinians to use the UNSCOP-2 proposal as the starting point for negotiations in which the two sides would seek to determine if they can agree on any mutually acceptable improvements. The United States could be invited into the process to play the role of honest broker.

Here is more.  Elliott Abrams doesn’t seem to like it.

The Life and Times of Thomas Schelling

His typist also worked for Agatha Christie and, during the time she was typing Schelling’s works on conflict resolution, she was also typing Christie’s classic play The Mousetrap.

That is from Robert Didge’s The Strategist: The Life and Times of Thomas Schelling.  This book is fun, fun, fun.  Rather than trying to signal his abilities as a "serious biographer," Didge gives the reader insight into Schelling and his times.  Yes it does cover both his career as a military advisor and his personal life.  The new Milton Friedman biography was a bore, this is a delight.

Thomas Schelling on Iranian nukes

It is important for the Iranians to understand – and have access to – technology like we have in the U.S. that disables bombs if they get into the wrong hands. U.S. weapons, for example, have “permissive action links”– a radio signal code that arms weapons but that will also automatically disarm them it if launched at an unauthorized target.

This will be a big dilemma for the U.S. If the Iranians get weapons, will we be willing to share the technology to ensure the security of their use? That is where the debate is heading.

Read more here, he does not much fear a nuke from al Qaeda either.  Thanks to the ever-essential for the pointer.

Facts about Thomas Schelling

1. Jorgen Weibull — who does evolutionary game theory — chaired the committee this year.  Addendum: Here is the full list of wise men, thanks to Dennis Josefsson for the pointer.

2. If you wanted to see much of Tom, you had to agree to meet with him on Saturday mornings.  This was my preferred time too.

3. Before The Strategy of Conflict, game theory was for the most part an abstract desert.  It is not easy to find concrete economic propositions in von Neumann and Morgenstern or for that matter in Nash.  Tom brought game theory into the real world.  The magnitude of this shift is hard to appreciate from the vantage point of today.

4. Schelling’s early research was on open economy macroeconomics.

5. He loves Bach, and The Art of the Fugue in particular, most of all the Grigory Sokolov version.  This is indeed a desert island set of discs.

Thomas Schelling, new Nobel Laureate

Note my biases, Schelling was my mentor at Harvard.

Tom is an unassuming guy, who looks as if he sells Hush Puppies at the local mall.  But he is one of the sharpest people you will meet.  He delivers the killer point, argument, or anecdote with striking regularity.  Even in his eighties he is sharp as a tack.  He has a deeply philosophical and humanistic approach to economics.  What are his contributions?

1. The idea of precommitment.  You can be better off, either individually, or institutionally, if your choices are limited in advance.  This is a key idea in monetary policy (many governments seek to tie the hands of their central banks), the theory of bargaining (try buying a used car, and see if the salesman doesn’t talk about "the boss upstairs"), and industrial organization (firms may invest in capacity to precommit a market position and deter rivals).  You find the precommitment frequently in movies as well, especially where kidnapping is involved; what is that Mel Gibson flick again?  Here is an excellent Jon Elster piece on the ambiguities of precommitment.  Here is my piece on similar themes.

2. The paradox of nuclear deterrence.  Ever see Dr. Strangelove?  Tom developed the idea that deterrence is never fully credible (why retaliate once you are wiped out?).  The best deterrent might involve precommitment, some element of randomness, or a partly crazy leader.  I recall Tom telling me he was briefly an advisor to Kubrick.  Here is someone else’s essay on the paradox of deterrence.

3. Focal points.  People coordinate by directing their attention to commonly recognized points of importance.  If a meeting time for lunch is not specified, you might assume 12 noon.  If someone mentions "economics blog," of course comes to mind.  And so on.  Much social coordination occurs in this manner.  I once asked me class: "If you had to hide a one hundred dollar bill in a book, so that your friend would find it, but you could not announce the book, which volume should you choose?"  Many said The Bible but of course the game theorist picks Schelling’s The Strategy of Conflict.

4. Behavioral economics and the theory of self-constraint.  One of Tom’s best pieces is "The Mind as a Consuming Organ," American Economics Review, 1984. Here is a lecture of his on self control.  Will Wilkinson cites a bit of that essay.  Tom made it respectable for economists to talk once again about happiness.

Tom has been an underrecognized father of behavioral economics.  His work on addiction, memory, and personal control was pathbreaking and came nearly twenty years before the "behavioral revolution" in economics.  He analyses the tricks people use to control their wills.  For Tom, self-control is often a more important determinant of happiness than is wealth.  Tom once told me his work sprung from his own attempts to quit smoking, which he did finally manage.  Several times.

5. The economics of segregation. Tom showed how communities can end up segregated even when no single individual cares to live in a segregated neighborhood.  Under the right conditions, it only need be the case that the person does not want to live as a minority in the neighborhood, and will move to a neighborhood where the family can be in the majority.  Try playing this game with white and black chess pieces, I bet you will get to segregation pretty quickly.  Here is a demo model for playing the game.

6. Later in his life Tom turned his attention to issues of global warming.  He has been skeptical of the idea that global warming involves insuperably high economic costs.  Here is a short essay by Tom on the topic.  Here is his excellent AER piece on the same topic.

Tom is not well-represented on the web, here is one photo, but the associated links are mostly broken.  Here is Tom’s piece on Hiroshima.  Here is the Wikipedia bio, note Wikipedia already reports he won the prize.  Here is a great interview with Tom.  Here is Tom’s work on the Copenhagen Consensus.

A few bio facts: Like so many other prestigious American economists, Tom worked for the Marshall Plan in its early stages.  He spent most of his career at Harvard, first in the economics department, later in the Kennedy School.  He had close ties with the Rand Corporation.  He was an advisor to Kissinger during the Vietnam War but quit in disgust.  He is now emeritus at University of Maryland.  I have always interpreted Tom’s political views as those of a conservative Democrat.

Here is a piece I wrote with Dan Klein and Timur Kuran, Salute to Schelling: Keeping it Human.  In this piece, recently published, we asked the Committee to give the Prize to Tom.  Here are Tom’s books, they are all worth reading.

Comments are open, you can add more; Tom could have won more than one Nobel Prize for all his contributions.

Interview with Thomas Schelling

Here is the link, courtesy of the Richmond Fed.  Tom talks about Bob Frank and relative status, what is right and wrong with mainstream economics, how he came up with the ideal of focal points, whether we can deter terrorists, and his role in the Copenhagen Consensus.  Although over eighty years old, Tom remains one of the smartest people I have met.

Thanks to Dan Klein for the pointer.

Thomas C. Schelling on why international terrorism is so rare

From a 1991 essay, “What purposes can “international terrorism” serve?”:

…I want to offer another conjecture on why international terrorism is so rare…whereas individual acts of terrorism may be easily within the capabilities of quite ordinary individuals , a sustained campaign on any scale may require more people and more organization than could be viable in most target countries.  And there may be some negative feedback from the low success rate to the low attempt rate: Resourceful individuals, people with brains or people with money, may find terrorism so unpromising that they do not choose to contribute effort or money.  And any organization that is secret and dangerous risks both defection and infiltration; a group of people large enough to carry on a sustained campaign, perhaps simultaneously in different target areas, may simply be too vulnerable in defection and infiltration.  Even seeking financial help risks being informed on.

That is one of the essays in the book Violence, Terrorism, and Justice, edited by R.G. Frey and Christopher W. Morris.  By the way, Schelling cites the campaign of Palestinian radicals against Palestinian moderates as one of the examples of a successful terrorist plan.

We had Nash and Schelling — who did the Soviets have?

The bi-polar confrontation between the Soviet Union and the USA involved many leading game theorists from both sides of the Iron Curtain: Oskar Morgenstern, John von Neumann, Michael Intriligator, John Nash, Thomas Schelling and Steven Brams from the United States and Nikolay Vorob’ev, Leon A. Petrosyan, Elena B. Yanovskaya and Olga N. Bondareva from the Soviet Union. The formalization of game theory (GT) took place prior to the Cold War but the geopolitical confrontation hastened and shaped its evolution. In our article we outline four similarities and differences between Western GT and Soviet GT: 1) the Iron Curtain resulted in a lagged evolution of GT in the Soviet Union; 2) Soviet GT focused more on operations research and issues of centralized planning; 3) the contemporary Western view on Soviet GT was biased and Soviet contributions, including works on dynamic stability, non-emptiness of the core and many refinements, suggest that Soviet GT was able to catch up to the Western level relatively fast; 4) international conferences, including Vilnius, 1971, fostered interaction between Soviet game theorists and their Western colleagues. In general, we consider the Cold War to be a positive environment for GT in the West and in the Soviet Union.

That is from a new paper by Harald Hagemann, Vadim Kufenko, and Danila Raskov, via Ilya Novak and Beatrice Cherrier.  And via Kevin Vallier, here is a new paper on how Schelling’s game-theoretic notion of stability may have come from his very early work on macroeconomics.