Economist advised Truman, won Nobel

Thomas C. Schelling, a game theorist who received the Nobel Prize in economics for insights that were credited with lessening the nuclear threat during the Cold War — and with helping explain why some neighborhoods are segregated, why smokers struggle so mightily to quit and why people send holiday cards even when they would rather not, died Dec. 13 at his home in Bethesda, Md. He was 95.

The cause was complications from a hip fracture, said his son Daniel Schelling.

Schelling’s career took him from government to academia and across disciplines, including economics, foreign policy, urban planning and psychology.

Trained as an economist, he came of professional age as an adviser and analyst during the Truman administration and grew fascinated by negotiations during the Cold War confrontation between the United States and the Soviet Union. He later taught for three decades at Harvard University before retiring in 2003 from the University of Maryland.

Schelling was best known for his application and elaboration of game theory, the mathematical study of decision-making amid conflict. For policymakers engaged with the Soviets and for experts who sought to analyze the standoff, his writings — particularly the book “The Strategy of Conflict” (1960) — became field guides for averting a nuclear crisis.

Schelling looked upon war as bargaining, in which competing sides are influenced by incentives and deterrents, promises and threats and the abundance or dearth of information. Among his insights was the idea that a party to a conflict may make itself stronger by reducing its own options.

For example, a president limited by legislative oversight may be stronger at a negotiating table than a president with no oversight. The adversary knows that the president with limited authority is not fully free to act as he or she pleases. Therefore, the adversary cannot reasonably demand as much as he or she might want.

The Nobel Prize citation honored Schelling and the Israeli economist Robert Aumann, who shared the economics prize in 2005, with “having enhanced our understanding of conflict and cooperation through game-theory analysis.”

In the 1970s, he used game theory to show how some neighborhoods became racially segregated, even when their residents say that they do not object to integration.

“Whites and blacks may not mind each other’s presence, may even prefer integration, but may nevertheless wish to avoid minority status,” he wrote in “Micromotives and Macrobehavior,” first published in 1978.

The concept of a “tipping” point, as elaborated by Schelling, was later popularized by best-selling author Malcolm Gladwell.

Schelling explored not only conflicts between warring parties, but also those within oneself, such as the battle fought by a smoker who promises to stop the habit, only to continually indulge in one “last” cigarette.