The Strategy of Conflict (1960) is a seminal reorientation of game theory that treats strategy not as the application of force in win-lose games, but as a theory of interdependent decision in “mixed-motive” situations where conflict is inextricably linked with mutual dependence and the need for coordination.

Takeaways

• Most situations are mixed motives
• Pure conflict and pure cooperation are rarer

Core insight: Most real conflicts are not pure conflicts, but mixed-motive situations where you cooperate and compete simultaneously. And limiting one’s own freedom can sometimes create the largest leverage because power comes from shaping expectations.

NOTES

About the Author:
Thomas C. Schelling (1921–2016) was an American economist and professor best known for applying game theory logic to the messy, psychological world of international relations and nuclear standoff during the Cold War. He was awarded the Nobel Prize in Economic Sciences in 2005.

Preface

This book analyzes situations where player share both conflicting and common interests in negotiations, war threats, deterrence, and extortion.
Schelling states that the same logic applies to disparate situations like limited war, jockeying in traffic, deterring international enemies, abd disciplining children. And ‘old’ customs like exchanging hostages solved real issues by leveraging principles that we should learn from to also solve modern issues.

• Most competitive situations contain mutual dependence. Your goal is often not annihilation but favorable terms within a shared framework. When negotiating salary, promotion, or business deals, identify what the other party needs from you and structure your position around that interdependence rather than pure confrontation

1 – The Retarded Science of International Strategy

Most conflicts are not zero-sum—the total gains are not fixed, so both parties can lose or both can gain depending on outcomes.
A central problem is that each participant’s best choice depends on what the other will do, creating an infinite regress of expectations. Rationality can be a strategic disability, because predictable rationality makes you exploitable, while demonstrated irrationality, obstinacy, or inability to receive communication can strengthen your bargaining position.

• Pure conflict is rare: in international affairs, there is mutual dependence as well as opposition. Pure conflict, in which the interests of two antagonists are completely opposed, is a special case; it would arise in a war of complete extermination, otherwise not even in war. For this reason, “winning” in a conflict does not have a strictly competitive meaning; it is not winning relative to one’s adversary. It means gaining relative to one’s own value system; and this may be done by bargaining, by mutual accommodation, and by the avoidance of mutually damaging behavior
• Most situations benefit from cooperation: most interesting international conflicts are not “constant-sum games” but “variable-sum games”: the sum of the gains of the participants involved is not fixed so that more for one inexorably means less for the other. There is a common interest in reaching outcomes that are mutually advantageous.
• Limited war also benefits from some coordination between temporary warrying factions: To characterize the maneuvers and actions of limited war as a bargaining process is to emphasize that, in addition to the divergence of interest over the variables in dispute, there is a powerful common interest in reaching an outcome that is not enormously destructive of values to both sides. A “successful” employees’ strike is not one that destroys the employer financially, it may even be one that never takes place. Something similar can be true of war.
• Deterrence works only through credibility, which requires committing oneself in ways that make backing down impossible or more costly than following through.
  • Burning bridges behind you, plate glass windows that shatter noisily, “trip wires” that automatically triggers response—these are tools for proving commitments.
• The strategic value of irrationality: A person who visibly cannot control his temper, cannot hear threats, or has an inconsistent value system becomes harder to coerce.

Practical applications:

• Reduce your own flexibility deliberately when facing an adversary. Announce positions publicly so retreat becomes costly. Use third parties or automatic mechanisms to remove your own choice.
• When threatened, make yourself unavailable for communication or demonstrate that you cannot understand the threat. The child who cries too loudly to hear the parent’s warning, the leader who is “out of town” when the ultimatum arrives, gains immunity.
• Mind your reputation to strengthen your commitments: future negotiations may depend on not backing down now. This is why losing power is genuinely costly—it reduces your future bargaining power across all relationships.
• Demonstrate that conceding is not possible, for example with too high costs of of reputation or losing face

2 – An Essay on Bargaining

Pure bargaining situations have no logical resting point—each party would accept less than they demand rather than reach no agreement, yet each knows the other knows this. The solution lies in tactics that voluntarily and irreversibly sacrifice freedom of choice to set a strong, visible boundary that the other party must take the limited gain or leave it and lose.

• 🔎 Examples: Union negotiators stir up membership to the point where they cannot accept less than the demand, diplomats who arouse public opinion that permits no concessions, executives who exhaust their budget early so the need for more funds becomes irresistible—all use self-binding to win.

Threats and promises distinguished: A threat is a commitment to do something you would prefer not to do, designed to deter the other party. Its efficacy depends entirely on credibility—the threatened party must believe you would actually carry it out despite the cost. Since you have no incentive to fulfill after the threat fails, you must arrange incentives or penalties that make fulfillment unavoidable. A promise is a commitment to the second party, required whenever agreement leaves incentive to cheat. Promises are credible if there are costs associated to not following through (ie., the “right to be sued” in legal frameworks).

Practical applications:

• Belegate authority to someone who cannot change instructions.
• Use threats that leave something to chance: create a shared risk rather than a certainty. It’s more credible than absolute threats because you don’t need to convince the other you would deliberately choose disaster, only that disaster might happen inadvertently.
• Devise threats that leave the final decision to them to maintain a good reputation: Similar to decomposing a threat into a series is starting a threat with a punitive act that grows in severity with the passage of time. Where a threat of death by violence might not be credited, cutting off the food supply might bring submission. For moral or public relations purposes, this device may in fact leave the “last clear chance” to the other, whose demise is then blamed on his stubbornness if the threat fails.
• Use peacemeal bargaining to gain trust and leverage long-term gains with cooperative players: . What makes many agreements enforceable is only the recognition of future opportunities for agreement that will be eliminated if mutual trust is not created and maintained, and whose value outweighs the momentary gain from cheating in the present instance. Each party must be confident that the other will not jeopardize future opportunities by destroying trust at the outset. This confidence does not always exist; and one of the purposes of piecemeal bargains is to cultivate the necessary mutual expectations.
  This is textbook smart cooperation
• Persuade others that you cannot concede. eg. “If I conceded to you here, you would revise your estimate of me in our other negotiations; to protect my reputation with you I must stand firm”
• Help others out of their commitments through casuistry—offer reinterpretations that let them save face while conceding. Help them find an “excuse” to retreat that preserves their reputation.
  This is where strategic thinking, Machiavellianism and frame control help

3 – Bargaining, Communication, and Limited War

When communication is impossible or incomplete, parties can still coordinate through focal point. These are conspicuous features of the situation that each expects the other to notice and, hence, to be likely choices.

In pure coordination (common interests), people can for example often find each other by going to prominent spots (eg, ‘info point’ in station, or the mall’s main entrance).
In mixed-motive situations (conflicting interests), the need for coordination can override the conflict at the focal point—the party disadvantaged by the obvious focal point may still accept it because no other point can be mutually recognized.

The power of the first and last offer: When someone makes a concrete proposal before communication is cut off, that proposal becomes the only available focal point. Even without acceptance, the other party knows you know it exists, and thus offer may coordinate expectations by default.
🔎 Example: parachutist saying “I’ll head for the highest hill” before jumping determines where both will meet up, even if the other thinks it’s stupid.

Practical applications:

• In ambiguous situations, be the first to propose a specific, salient solution. Name a number, suggest a meeting point, propose a deadline. The “if not here, where?” argument is powerful when there is no other focal point.
• Commit to a principle: commitments usually have to be qualitative rather than quantitative, and to rest on some rationale. It may be difficult to conceive of a really firm commitment to $2.07½; why not $2.02¼? The numerical scale is too continuous to provide good resting places, except at nice round numbers like $2.00. But a commitment to the principle of “profit sharing,” “cost-of-living increases,” or any other basis for a numerical calculation that comes out at $2.07½, may provide a foothold for a commitment.
• Leverage precedents and be careful of the precedents you set: Precedent seems to exercise an influence that greatly exceeds its logical importance or legal force.
• Justify your concession to avoid losing reputation: Concession not only may be construed as capitulation, it may mark a prior commitment as a fraud, and make the adversary skeptical of any new pretense at commitment. One, therefore, needs an “excuse” for accommodating his opponent, preferably a rationalized reinterpretation of the original commitment, one that is persuasive to the adversary himself.
• Qualitative distinctions matter more than quantitative ones. In negotiations, seek principles and clear lines in the sand rather than sliding scales—”profit sharing” is ambiguous; 50/50 is not.
  eg., “No gas” works as a limit on war because it’s simple and unambiguous; “some gas” cannot be coordinated.
• Use natural boundaries to crystallize convenient agreements. Say ’10’ instead of ‘9.7’. Natural boundaries, round numbers, historical precedents, and cultural conventions all serve as focal points. The river, the 50-yard line, the 50-50 split, the previous year’s price—these are not necessarily fair, but they are recognizable.

4 – Toward a Theory of Interdependent Decision

In games of pure coordination (identical interests) players can converge on the same choices without communication. The intellectual process is a recursive problem: what does he expect me to expect him to expect me to do?

For example, the number 1 wins in “pick a positive number” because it’s the first positive number. Labels, connotations, and symbolic details can also transcend the mathematical structure to become the shared choice.

Contrast with zero-sum games: In coordination, you want to avoid randomization and look for shared logic. In pure conflict, randomization prevents the enemy from anticipating your move.

• Pure cooperation may be rare since all options must be equally preferable: the zero-sum game is the limiting case of pure conflict, what is the other extreme? It must be the “pure-collaboration” game in which the players win or lose together, having identical preferences regarding the outcome. Whether they win fixed shares of the total or shares that vary with the joint total, they must rank all possible outcomes identically, in their separate preference scales. (And, to avoid any initial conflict, it has to be evident to the players that the preferences are identical, so that there is no conflict of interest in the information or misinformation that they try to convey to each other.)
• Accommodation requires some honesty, but deceiving can still provide an advantage: Mutual accommodation ultimately requires, if the outcome is to be efficient, that the division of gains be in accordance with “comparative advantage”; that is, the things a player concedes should be those that he wants less than the other player, relative to the things he trades for. Each needs, therefore, to communicate his value system with some truth, although each can also gain by deceiving.
  TPM Note: this can make some of the literature on negotiation naive, as it ignores the possible advantages of deception and manipulation. See for example the otherwise valid ‘Getting to Yes‘

Practical applications:

• Look for uniqueness when you need to align with allies, not what is optimal. The most prominent meeting point beats the most convenient one if prominence is what others will notice.
• Label options to set frames and control the outcome: If you control how choices are presented, you control what becomes focal. Ordering options alphabetically, putting yours first, or framing the decision in terms of your preferred analogy all shift expectations.

5 – Enforcement, Communication, and Strategic Moves

A strategic move influences another’s choice by affecting their expectations of your behavior.

Schelling describes how constraining your own behavior can leave the other a simple maximization problem whose solution benefits you. Threats, promises, commitments, delegations, and destruction of communication can all serve to constrain your behavior or affect expectations.

The power of limited freedom: constraining your choices can improve your strategic position. A penalty that makes you unable to pay blackmail protects you from extortion. Burning bridges behind you disheartens the enemy. Putting your assets in forms that cannot be transferred makes you immune to threats against your family. Delegating decisions to agents with different incentive structures (insurance companies, sadistic guards, foreign troops who cannot receive threats) changes the game by making certain responses automatic or certain communications impossible.

The power of being attacked, sued, and pursued: The power of being identified and sued (legal enforceability) is the power to make promises. If you could not be made to pay for a breach of agreement, your word would carry little weight.

The power of secrecy against intimidation: The secret ballot goes both ways. Voters cannot reliably sell votes, but they also cannot be intimidated. <— TPM Note: This only works in a perfect game theory scenario. In real life, there have been plenty of votes that have been traded

• Trust is required when there is no outside authority, but it’s not a given: Enforcement schemes. Agreements are unenforceable if no outside authority exists to enforce them or if noncompliance would be inherently undetectable. The problem arises, then, of finding forms of agreement, or terms to agree on, that provide no incentive to cheat or that make noncompliance automatically visible or that incur the penalties on which the possibility of enforcement rests. While the possibility of “trust” between two partners need not be ruled out, it should also not be taken for granted
• A strategic move influences the other party’s move: If the essence of a game of strategy is the dependence of each person’s proper choice of action on what he expects the other to do, it may be useful to define a “strategic move” as follows: A strategic move is one that influences the other person’s choice, in a manner favorable to one’s self, by affecting the other person’s expectations on how one’s self will behave.
• Disarmament may work better by removing defensive weapons only: the hostage idea is logically identical with the notion that a disarmament agreement between the major powers might be more efficacious (and probably more subject to technical control) if it related to defensive weapons and structures. To eschew defense is, in effect, to make hostages of your entire population without bothering to put them physically into the other’s possession.
• Trust rests on the continuation of win-win: Trust is often achieved simply by the continuity of the relation between parties and the recognition by each that what he might gain by cheating in a given instance is outweighed by the value of the tradition of trust that makes possible a long sequence of future agreement. <— TPM Note: This is the ‘shadow of the future’ into the present as well explained by Axelrod in The Evolution of Cooperation

Practical applications:

• Build cooperation and trust by leveraging the possibility of long-term win-win, a strategy that we expand in Power University
• Reduce your own options to make the threat credible. Station troops where they cannot retreat. Give authority to someone else with proven resolve. Create automatic response mechanisms that cannot be countermanded.
• To resist threats, make yourself unavailable for communication or incapable of understanding. Turn off communication channels. Demonstrate ignorance of the threat’s content. Delegate authority to intermediaries.
• Use third parties strategically. Delegating authority can free you from pressure and costs in case you decide against the request. A hostage (literal or figurative) can guarantee compliance when trust is absent.

Twenty VS. 1 Guman

Schelling uses the example of twenty unarmed men facing a gunman with six bullets to show that power in conflict depends less on raw numbers than on coordination, credibility, and commitment.

The group could overpower him, but only if they can agree on how to share the risk, credibly commit to acting together, and reassure the gunman that surrender will not lead to punishment.

Meanwhile, the gunman retains power if he can divide them, prevent communication, undermine their promises, or credibly commit to retaliation.

The broader lesson is that domination by a minority or a single actor often persists not because the majority lacks strength, but because it lacks the tools to channel the power of numbers (coordination, trust, and mechanisms for credible collective action).

6 – Game Theory and Experimental Research

Mixed-motive games among humans entail psychology. People must achieve a meeting of minds that cannot be deduced analytically.
Taking hints, perceiving patterns, and coordinating expectations are fundamentally social phenomena that depend on shared culture, context, and experience.

The role of context, culture, and psychology: Coordinating an efficient outcome often depends on familiar patterns, historical precedents, and cultural conventions. Players with similar backgrounds coordinate more easily. Practice and how the game evolves also matter. The opening moves shape what rules are later recognized. And when there are no precedents, players create their own boundaries and rules as they go.

Practical applications:

• Learn about the other player: When entering any strategic interaction, understand the other party’s cultural frame. What precedents do they recognize? What analogies will they see? What focal points exist in their mental landscape?
• Slow things down to boost coordination: The tempo of interactions matters. Incremental moves with time for response allow mutual accommodation to develop. Rapid, irreversible moves preempt the learning process and make coordination harder.
• Build traditions of trust through small preparatory bargains before tackling large issues. Each party risking a small investment to demonstrate good faith creates the mutual expectation that trust is available and valuable

You cannot demand trust; you can only demonstrate that you appreciate it and can be trusted

TPM Note: Schelling turned out to be right
Future research found out that humans are often conditionally cooperative, that fairness matters, and generally that humans are far less rational than original game theory posited

7 – Randomization of Promises and Threats

A threat of certain mutual destruction may be incredible because you would never actually choose it, but a threat to create a 10% chance of mutual destruction may be both credible and sufficient. The probability of fulfillment scales down too-large promises or threats and makes it more credible.

Smaller threat = smaller cost of following through: If a threat might fail to change behavior because of misjudgment, miscommunication, or the other party’s irrationality, your costs to maintain reputation are high when you must followup. A smaller threat reduces your losses when it fails.

Optimal threat fine-tuning: The optimal threat is the smallest that still meets the minimum deterrence threshold. Fractional threats—threats with probability π of fulfillment—allow fine-tuning that pure threats prohibit.

Practical applications:

• Threaten probabilities when certitude is not credible: Warning that your dog that might bite can be more intimidating than it certainly will because the certainty threat raises doubts. The risk of accident, the chance of escalation, the possibility of third-party intervention—all can create higher-credibility probabilistic threats.
• Use lotteries to overcome impasses: In negotiations, use lotteries to make indivisible objects divisible. “We flip a coin for it” is often superior to either “you get it” or “I get it” when both want it and neither can concede.
• Use ‘increased risk with time threats’ to pile up pressure: A threat that starts fulfilling itself creates urgency for the other party to comply before the risk materializes, or before the risks become too large (ie.: speeding up a car which boosts the risks of a crash; pulling the trigger of a Russian roulette game)

8 – The Threat That Leaves Something to Chance

Since threats are costly to execute, the most credible threats are those where fulfillment is not entirely under your control. If you can demonstrate that the probability of war, accident, or disaster rises when the other party takes certain actions, and that you cannot fully prevent that escalation, you create a threat that works even if you obviously prefer to avoid the outcome.

The threat that leaves something to chance does not require you to prove you would choose disaster, but only that ‘disaster might happen’. This is more credible because it doesn’t depend on your resolve, only on the uncontrollable elements of the situation.
Says Schelling:

The threat is not quite of the form “I may or may not, according as I choose,” but, has an element of, “I may or may not, and even I can’t be altogether sure.”

Limited war is effective as deterrence partly because it generates a shared risk of general war—a risk neither side can completely control.

Brinkmanship explained: The brink is not a sharp change from 0 to 1, but a curved slope where the risk of slipping increases as you advance. Brinkmanship as defined by Schelling means getting onto that slope, creating a recognizable risk that you may fall in spite of your own best efforts, and dragging the adversary with you. The ideal deployment of brinkmanship tactics is to let the situation get somewhat out of hand because its being out of hand is intolerable to the other party.

Practical applications:

• Threaten to create conditions where punishment might occur inadvertently whenever you cannot credibly threaten a deliberate action. The risk itself becomes the sanction.
• Play the crazy game for intimidation: In escalating conflicts, the other party’s perception of risk may be more influential than your actual intentions. Actions that signal “this is getting out of control” can be more persuasive than explicit threats.

9 – The Reciprocal Fear of Surprise Attack

When striking first carries an advantage, each party fears the other might strike preemptively out of fear of being struck first. This creates an infinite regress of suspicion: he fears I might strike because I fear he might strike because he fears I might strike… The problem pertains to all partners who distrust each other (for example, each tempted to steal or consume joint assets, each fearing the other might do so first or faster).

The threshold condition: The spiral only leads to a first attack if at least one party’s basic probability of “irrational” attack exceeds a critical threshold. Below that threshold, the regress stabilizes—each knows the other will not attack, so fear of fear does not generate additional motive. Above the threshold, the situation collapses into certain attack.
The multiplier effect does not produce intermediate probabilities, but an all-or-none outcome.

The same applies to warning systems that trigger processes of counter-attack.
So sometimes the best way to prevent surprise attacks is to be visibly incapable of surprising: making your own first strike impossible rather than trying to detect the other’s.

Practical applications:

• Assess whether fear and supiscion is dangerously high: In any relationship where preemption is possible (business partnerships, alliances, competitive markets), assess whether the temptation to defect exceeds the threshold. If it does, expect defection or attack; if it does not, focus on increasing trust to boost cooperation to

10 – Surprise Attack and Disarmament

Stable deterrence requires that a first strike cannot destroy the other’s ability to retaliate (ie.: the balance is stable only when neither, in striking first, can destroy the other’s ability to strike back).

This means that the balance of terror is stable only when retaliatory forces are invulnerable. This leads to counterintuitive conclusions: weapons that are good at killing people but bad at killing other weapons are stabilizing; weapons designed to destroy enemy missiles and bombers are destabilizing because they create first-strike advantage.

The hostage-defense paradox: A stable balance of terror is a modern form of massive exchange of hostages. Each side holds the other side’s population under the threat of nuclear war. Civil defense that protects populations actually destabilizes deterrence because it reduces the hostage value. “Dirty” bombs that maximize civilian casualties can be more stabilizing than “clean” bombs that target military forces.

The disarmament paradox: Sometimes more weapons increase stability. If each side needs to destroy a certain percentage of the other’s forces to prevent retaliation, larger starting numbers require larger proportional advantages to achieve dominance, making arms racing less attractive.

Practical applications:

• Distinguish between offensive and defensive capabilities when evaluating competitive situations. The ability to neutralize the other’s ability to respond is destabilizing; the ability to absorb punishment and still respond is stabilizing.
• Seek arrangements where both parties can always strike back in business, partnerships, or any mutual deterrence situation (and neither party can preempt the other’s ability to respond).
  Escrow accounts, automatic renewal clauses, reciprocal hostages create stable cooperation by making first-move advantage disappear.

SHARPEST INSIGHTS

These are the insights that struck us the most.
We use the authors’ quotes and research, but the titles and interpretations are our own—and may not reflect the authors’ intent.
Credit for the insight goes to them; blame for the interpretation is on us.

Much of ‘Negotiation Skills’ is in The Preframe

This conclusion may seem to reduce the scope for bargaining skill, if the outcome is already determined by the configuration of the problem itself and where the focal point lies. But perhaps what it does is shift the locus where skill is effective. The “obvious” outcome depends greatly on how the problem is formulated, on what analogies or precedents the definition of the bargaining issue calls to mind, on the kinds of data that may be available to bear on the question in dispute. (…) Much of the skill has already been applied when the formal negotiations begin.

And when the frame is already set, the skill is in undoing it. The author proposes to approach with confusion, but which in truth can be done with even more effective approaches:

Perhaps another role for skill is contained in this general approach. If one is unsuccessful in getting the problem so formulated that the “obvious” outcome is near his own preferred position, he can proceed to confuse the issue. Find multiple definitions for all the terms and add “noise” to drown out the strong signal contained in the original formulation. The technique may not succeed, but in the variant of our income-tax problem mentioned above it certainly did.

Learn more about these skills:

• Frame control techniques
• Basics of frame control

Strengthening or Weakening Frames

The author talks about the shared belief of nuclear weapons as completely different from other weapons or as ‘just another weapon’.
But these dynamics apply to most beliefs and frames:

It is a distinction that to some extent we can strengthen or weaken, clarify or blur. We can strengthen the tradition, and enhance the symbolic significance of this distinction, by talking and acting in a way that is dramatically consistent with it; we can erode the distinction—but not readily destroy it—by acting as though we do not believe in it, by emphasizing the “just-another-weapon” argument and by making it evident that we in fact have little compunction about using nuclears.

Mafia & International Relations Are Similar

Gang war and international war have a lot in common. Nations and outlaws both lack enforceable legal systems to help them govern their affairs. Both engage in the ultimate in violence. Both have an interest in avoiding violence, but the threat of violence is continually on call. It is interesting that racketeers, as well as gangs of delinquents, engage in limited war, disarmament and disengagement, surprise attack, retaliation and threat of retaliation; they worry about “appeasement” and loss of face; and they make alliances and agreements with the same disability that nations are subject to—the inability to appeal to higher authority in the interest of contract enforcement.

Splitting the Difference Works

Contrary to popular books on negotiation, splitting the difference actually works well:

The frequency with which final agreement is precipitated by an offer to “split the difference” illustrates the same point, and the difference that is split is by no means always trivial. More impressive, perhaps, is the remarkable frequency with which long negotiations over complicated quantitative formulas or ad hoc shares in some costs or benefits converge ultimately on something as crudely simple as equal shares, shares proportionate to some common magnitude (gross national product, population, foreign-exchange deficit, and so forth), or the shares agreed on in some previous but logically irrelevant negotiation.

QUOTES

On learning from Mafia, The Art of War, Machiavelli, and Machiavellianism instead of ‘good people’:

Here perhaps we perceive a disadvantage peculiar to civilized modern students of international affairs, by contrast with, say, Machiavelli or the ancient Chinese. We tend to identify peace, stability, and the quiescence of conflict with notions like trust, good faith, and mutual respect. To the extent that this point of view actually encourages trust and respect it is good. But where trust and good faith do not exist and cannot be made to by our acting as though they did, we may wish to solicit advice from the underworld, or from ancient despotisms, on how to make agreements work when trust and good faith are lacking and there is no legal recourse for breach of contract.

On concessions coming from strength and resolve:

A bargain is struck when somebody makes a final, sufficient concession. Why does he concede? Because he thinks the other will not.

When troops are really hostages:

the American divisions that were stationed in Europe principally to demonstrate that America could not avoid becoming engaged in a European conflict can probably be viewed as hostages; if they cannot, their wives and children can

🙋🏼‍♂️ Lucio’s Analysis

The Premise of Rational Players is Limited in Real-World Applications

Although the author adds plenty of caveats, overall it still feel like most of the situations imply rational player maximizing for self interest, without human emotions like anger, stubborness, or pride getting in the way.
For example, he writes:

But if B can link the projects together, offering to carry out one while A carries out the other, and can effectively threaten to abandon both unless A carries out one of them, A is left an option with a gain of four and a cost of three, which he takes, and B cuts his cost in half.

However, in the real world A may get angry and force B out of his plot. Or he may get angry and simply refuse to deal with B, preferring to walk away with a loss but his ‘honor’ intact, rather than submitting to blackmail. This would not be uncommon.

I had similar reservations across several scenarios. For example, the author also says that:

• The threat is not credible unless the threatener shows that he has an incentive to carry it out <— TPM Note: However, most threats that are carried out in interpersonal relationships are fueled by anger and vengeance
• The wife ‘wins’ the argument if she yells her favorite restaurant and then hungs up. <— TPM Note: But only a pushover man would go meet her after such a power move
• To be credible in your threat to capsize the boat, you have to risk capsizing it <— TPM Note: This really depends on the personality of the players. A fearful man in the company of a crazy man may be persuaded by the simple mention of capsizing

Some Games Simplify Reality

Just as an example, the twenty men held up for robbery by a single man who has a gun and six bullets scenario takes for granted that 6 men would die if they all attacked.

In truth, ‘one shot equals not one kill’.

Even more relevant, a mass simultaneous attack would likely lead to no shooting at all since the armed robber’s faith would be much worse if he inflicted maximum damage before being overrun (ie., he prefers being captured as a ‘good guy’ rather than a murderer).

Finally, in many real-life scenarios, most captives may be better off not to attack at all, since most hostages are eventually released.

REVIEW

The Strategy of Conflict is a seminal book that moved attention beyond simpler and math-focused win–lose games to the more common and more real-life practical mixed-motive conflicts, where cooperation and competition coexist.

This is also an important milestone in game theory for the work we do at The Power Moves, learning from the science with the goal to boost real life effectiveness.
We agree and support Schelling’s criticism that the previous mathematically elegant version of game theory, including Nash’s work, was incomplete for the kinds of strategic situations that matter most in real life.

Schelling first opened the door to a messier world, including a world where psychology first started playing a role.

On the downside, some parts still remain somewhat abstract. While Schelling is credited for moving beyond pure mathematical models, we believe that real-world decision-making is even more deeply governed by psychology and irrationality.
This could mean that in the real world, a strategically minded man who thinks with psychology-first may often outperform a game theorist armed with equations, but with less understanding of human nature.

Get it on Amazon or check our most recommended books.