The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2005
Robert J. Aumann, Thomas C. Schelling
Thomas C. Schelling
Born: 14 April 1921, Oakland, CA, USA
Affiliation at the time of the award: University of Maryland, Department of Economics and School of Public Policy, College Park, MD, USA
Prize motivation: "for having enhanced our understanding of conflict and cooperation through game-theory analysis"
Field: game theory
Contribution: 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.
Prize share: 1/2