A Well Deserved Nobel Prize

Wow! I never thought I'd see the day that Game Theory would win a Nobel Prize for economics.

Waitasec...

Oh, I see.

Thomas C. Schelling, a Bethesda resident and retired University of Maryland professor, won the Nobel Prize in economics today for his application of game theory to issues ranging from global security to racial segregation to the behavior of people stuck in traffic. Specifically, Schelling sought to expand explanations for social, political and economic phenomena by taking into account the way people interact with one another.

Jerome a Paris has his own theory about this win over at the European Tribune:

As someone who has written a (not widely read) Ph.D. dissertation entitled "The independence of a country: what game theory can tell us, and an application to Ukraine", this is a topic dear to my heart, and Thomas Schelling's works (especially The Strategy of Conflict) played a prominent role in my formative years, a decade or so ago. [...] Writing this diary brings about a flood of memories as I go back into my dissertation and look for quotes. I mentioned Schelling on the first page of my dissertation, pointing out that for him, "game theory" really is a theory of strategic games, i.e. of games where your best outcome depends on the decisions of others, and it is really a theory of interdependent decisions. This makes me wonder if this Nobel prize isn't, once again, highly political and a slap to Bush and the neocons who have been strutting around on the world stage trying to impose America's will and values to the rest of the planet, by force if necessary, refusing to acknowledge the priorities, preferences and desires of others and persuaded that military force is a solution to everything. Game theory, which examines how one should behave to maximise results with a given hand, shows that even a strong hand does not necessarily bring about your preferred outcome - it all depends on what the others do, and obtaining their cooperation willingly can lead to much better outcomes for you. This is a lesson this White House should learn if it's not too late...