The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2005
Robert J. Aumann, Thomas C. Schelling
I was born April 14, 1921, in Oakland California, spent most of my boyhood in California, with three years in the east and two in the Panama Canal Zone, my father being a naval officer. I 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 I attended Harvard University, completing my Ph.D exams in June of 1948. Appointed a Junior Fellow of the Society of Fellows, I took leave to join the administration of the Marshall Plan, spending one year in Copenhagen and a year and a half in Paris, resigning my fellowship. In November, 1950, I 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. I left in the fall of 1953 to join the faculty of Yale University.
My experience abroad and in Washington mostly involved negotiations. I was an active participant in negotiating the European Payments Union in 1950; in Washington my responsibilities related to aid negotiations with European governments, primarily in connection with those governments' contributions to the new NATO defense establishment. I had, at Harvard, become interested in bargaining strategy, and my government experience gave me much of the background I needed when later I decided to make bargaining theory my primary theoretical interest.
At Yale I began publishing what I believe the Nobel selection committee considered my contribution to "understanding cooperation and conflict," first an "Essay on Bargaining" in 1956, in the American Economic Review, and "Bargaining, Communication, and Limited War" in the inaugural issue of the Journal of Conflict Resolution, 1957. Interestingly, these two articles were completed before I had more than a smattering of acquaintance with formal game theory. In 1957 the book, Games and Decisions by Howard Raiffa and R. Duncan Luce was published; it was my professional introduction to game theory, and I spent at least a hundred, maybe two hundred, hours with it.
In the spring and summer of 1958 I took my family to London, where I pursued what I considered my concept of game theory in a manuscript – typed by the woman on Charing Cross Road who did all of Agatha Christie's books and plays – and submitted it to the Journal of Conflict Resolution. It was so long that that Journal decided to make it a whole issue. I persuaded the editor that a smart way to publicize the new journal would be to give me, without charge, instead of reprints three hundred copies of the journal to send to everyone I could think of. I called my article, "Prospectus for a Reorientation of Game Theory." I was trying to get game theorists to pay more attention to strategic activities, things like promises and threats, tacit bargaining, the role of communication, tactics of coordination, the design of enforceable contracts and rules, the use of agents, and all the tactics by which individuals or firms or governments committed themselves credibly. I don't think I had any noticeable influence on game theorists, but I did reach sociologists, political scientists, and some economists.
While in London I had made the acquaintance of several scholars and former military officers who were interested in theories of deterrence and limited war. I began to appreciate that the most immediate and important application of the kind of "game theory" I was pursuing was in military foreign policy, especially nuclear weapons policy. I became a close friend of Alastair Buchan, who was just establishing the Institute for Strategic Studies in London, an institute that was to be hugely influential in drawing scholars from all over Western Europe, North America, and Japan to its annual meetings at Oxford, Cambridge, Bonn, and other sites.
I then became the guest of the RAND Corporation, in Santa Monica , California, for twelve months, before settling at Harvard University , which had offered me a position I'd share between the Department of Economics and the Center for International Affairs. At RAND I continued my theoretical work, and went to Washington with a small contingent attached to the staff preparing for a prospective Geneva Convention on Measures to Safeguard Against Surprise Attack. I did not go to Geneva ; I did, however, produce two papers. One, "Surprise Attack and Disarmament," explored the concept that the problem of nuclear surprise attack was the problem of the advantage, in case of war, of being the side to start it. Arms control should be oriented toward measures that precluded either side's acquiring a pre-emptive capability, a "first-strike" capability as it was called. And this objective, somewhat paradoxically, entailed arranging for the safety not of populations and industrial assets but of retaliatory nuclear weapons.
At RAND I also developed the idea of a "probabilistic threat," and spelled it out under the title, "The Threat That Leaves Something To Chance." I also, that year at RAND, began drawing on an idea that is sometimes referred to as a "Schelling point," or "focal point," to argue that the only viable convention regarding the use of nuclear weapons would be "no weapons," not some quantitative or qualitative limits. (This idea became the germ of my Nobel Memorial Lecture, forty-five years later.)
Most of the work I have described appeared in 1960 as "The Strategy of Conflict," Harvard University Press.
I then spent thirty-one years at Harvard University, first in the Department of Economics and the Center for International Affairs, then in the Department but also, beginning with its establishment in 1969, in the John F. Kennedy School of Government. For ten years the Center gave me freedom to write and to consult, and I spent much of my time, especially during the summer, doing advisory work for the government.
During my first year at Harvard the Center received a grant, together with the MIT Center for International Studies, to spend on some joint activity. A colleague at MIT and I decided we'd establish a Center for Arms Control, that would meet every three weeks at one or the other faculty clubs for dinner discussion. The summer of 1960 I spent, with a dozen or more colleagues from Harvard and MIT at a "summer study" of arms control, financed by the Twentieth Century Fund. I had arranged to host a young colleague from the Yale graduate school, Morton H. Halperin, for his dissertation work, and took the occasion to make him a rapporteur for the summer study. At the end of the summer, Halperin and I decided to write a book reflecting the consensus the group was developing. We took advantage of the Harvard MIT Center for Arms Control by submitting chapter after chapter as the texts for discussion. The book, Strategy and Arms Control, 1961, was finished and available within a couple of weeks of the Kennedy inauguration.
The timing was perfect. Kennedy appointed as his national security adviser a Harvard dean who had participated in the autumn discussions of arms control, and as his White House science adviser an MIT professor who had been one of the group; another member became Deputy Assistance Secretary of Defense for Arms Control, another General Counsel of the State Department. Because of these connections I was appointed chairman of several interagency committees concerned with nuclear weapons policy over the next several years. (One of them brought into being the "hotline" between the Kremlin and the U.S. Government, another initiated the process that led, after a hiatus caused by the Soviet invasion of Czechoslovakia, to the Anti-Ballistic Missile Treaty.)
Partly because I had "connections," I devoted most of my research during the ‘60s to weapons policy, publishing Arms and Influence, Yale University Press, 1977. In the spring of 1970, upon the U.S. invasion of Cambodia, I led a group of Harvard faculty to meet with President Nixon's national security adviser to declare our opposition to the invasion and break relations with the Administration. That ended my connection with the government.
During the seventies and eighties two subjects intrigued me. One resulted from my participation, for seven years, in a committee of the National Academy of Sciences on Substance Abuse and Addictive Behavior. I observed that people who had habits or addictions or delinquencies often attempted, sometimes successfully, sometimes not, to deal with themselves as they might deal with another's misbehavior, attempting, in effect, to "commit" themselves to avoiding the bad behavior or performing the good. Several essays on this topic are in two books of mine, Choice and Consequence, 1984 and, just recently, Strategies of Commitment, 2006.
The second subject that occupied me in the seventies was the ways that individual behavioral choices could aggregate into social phenomena that were unintended or unexpected. One part of this work involved modeling spatial "segregation," the ways that people who differ conspicuously in binary groups – e.g. blacks and whites, males and females, officers and enlisted personnel, francophones and anglophones – get separated spatially, in residence, in dining halls, at public events. Without knowing it I was pioneering a field of study that later became known as "agent-based computational modeling." Much of this work was published in Micromotives and Macrobehavior, 1978.
In 1980 President Carter was to attend a "summit" in Venice. The Chancelor of Germany had submitted, for the agenda, the "carbon dioxide problem." The White House asked the National Academy of Sciences for advice on what to do with that item. I was invited to chair a committee that would do a quick study and prepare advice; I confessed I knew virtually nothing of the subject and was told I could learn most of what was known in the four weeks before the committee would meet. I took the job, I had a superb committee and learned a lot, we did a satisfactory report, and I thought that was the end of an interesting experience.
A few months later the Congress appropriated funds for a longer, more substantial study, and, undoubtedly because I recently chaired a committee on the subject, I was asked to join the Carbon Dioxide Assessment Committee of the National Academy of Sciences. There I spent some fifty days over a two year period with a dozen scientists from the most pertinent disciplines and became an extremely well educated amateur. I wrote the chapter of our report on "policy and welfare implications of climate change."
That subject remains a major interest. Its relevance to my Prize is that mobilizing to do something about prospective global warming and climate change is what I expect to be, during this century, what nuclear arms control was during the century just past, namely an immense challenge to "cooperation amid conflict." My latest thoughts on the subject can be found in the 2006 book mentioned above.
In 1990 I retired from Harvard and accepted appointment as Distinguished University Professor at the University of Maryland, in the Department of Economics and the School of Public Policy. I continued my interest in nuclear weapons policy, climate change, commitment, and terrorism, the latter interest stimulated by another invitation to participate in a committee of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine, the Committee on Science and Engineering for Counterterrorism, two months after September 11, 2001.
As I reflect on my career I am struck with how much of what I am pleased to have accomplished was initiated by good luck and by the initiative of others. During the War, deemed unfit for military service by the Army and the Navy, I landed a superb job in the Bureau of the Budget; with that experience I was admitted to Harvard Graduate School with a teaching fellowship; I was invited to join the Marshall Plan and my boss took me to Copenhagen; from there to Paris and from there to the White House. RAND was by unsolicited invitation. The Kennedy Administration drew colleagues into influential positions and gave me access to senior officials. National Academy of Sciences committees approached me unexpected. I've had all the advantages. And now the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel promises more opportunities.
From Les Prix Nobel. The Nobel Prizes 2005, Editor Karl Grandin, [Nobel Foundation], Stockholm, 2006
This autobiography/biography was written at the time of the award and later published in the book series Les Prix Nobel/Nobel Lectures. The information is sometimes updated with an addendum submitted by the Laureate.
Copyright © The Nobel Foundation 2005