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43 of 43 people found the following review helpful
5.0 out of 5 stars Everyone should read this book
"The Strategy of Conflict" changed the development of game theory in several ways, but none was more important than Schelling's focus on real life examples, situations or games that are relevant to what we encounter in our daily lives. Before Schelling, game theory analysis was abstract and mathematical; it focused on zero-sum games, where interests were purely...
Published on September 7, 2006 by P.C.

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43 of 43 people found the following review helpful
5.0 out of 5 stars Everyone should read this book, September 7, 2006
This review is from: The Strategy of Conflict (Paperback)
"The Strategy of Conflict" changed the development of game theory in several ways, but none was more important than Schelling's focus on real life examples, situations or games that are relevant to what we encounter in our daily lives. Before Schelling, game theory analysis was abstract and mathematical; it focused on zero-sum games, where interests were purely conflicting and there were no incentives to cooperate. Game theorists built convincing abstract models for these types of games, but its application was limited, since most interactions were a mixture of conflict and mutual dependence. In other words, analysis focused on pure conflict, a limiting cases of real world interactions, while in "The Strategy of Conflict" Schelling attempts to generalize game theory analysis to richer games that are `played' in the real world. His generalization introduced the concepts, commitments, threats, promises, communication systems, focal points, and randomization of strategies into game theory (chapters 1~8), which was then used to analyze the its applications in national security (chapters 9 and 10).

If you are studying game theory, this book is a must read. If you are just interested in game theory, I'd recommend reading this book too.
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98 of 109 people found the following review helpful
4.0 out of 5 stars Schelling�s major contribution to game theory, August 6, 1998
By A Customer
This review is from: The Strategy of Conflict (Paperback)
Schelling's major contribution to game theory (and the study of culture) was the concept of focal points. He observed that in real life bargaining each player would rather make a concession than fail to reach any agreement at all. And there are a wide range of outcomes that would be preferable to both of them than no agreement at all. Now without some procedure to select among those acceptable alternatives, people might never come to a satisfactory agreement. This is where the key concept of "focal points" comes into play. Schelling defines focal points as "intuitively perceived mutual expectations, shared appreciations, preoccupations, obsessions, and sensitivities to suggestion." He criticized traditional game theorists for failing to recognize that "players" actually achieve much better coordination and cooperation when they are able to rely upon focal points. Although he does not make this analogy, it seems that focal points represent some sort of a "templat! e" or "blueprint" that helps to unify understanding and coordinate action. However, for Schelling, "focal points" are quite arbitrary-whether and to what degree they serve to coordinate action and expectations is the key question.
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39 of 41 people found the following review helpful
5.0 out of 5 stars fascinating, December 6, 2002
By A Customer
This review is from: The Strategy of Conflict (Paperback)
I disagree with the review that describes Schelling's primary contribution here as the idea of focal points. This is one of the key insights in the book, but only one. He also has a fascinating discussion of threats, promises, and credibility and the relation of these issues to national security issues. The connection is explored further in Schelling's Arms and Influence, while this book is more theoretical in its orientation. I highly recommend this book to anyone who knows a little game theory but is frustrated by the level of abstraction which pervades the theory.
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6 of 6 people found the following review helpful
5.0 out of 5 stars enjoyable game theory, April 24, 2010
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This review is from: The Strategy of Conflict (Paperback)
Other reviewers have explained Schelling's insights, so I won't bother to touch on them.

Often you read books where economists find new applications for known principles. Often you read books where economists lay down some new insight they've had into what can be a very technical field.

Strategy of Conflict does both. Schelling does a wonderful job finding applications for *new* insights and explaining them in a readable way.
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21 of 27 people found the following review helpful
5.0 out of 5 stars Major contribution and still relevant after decades, November 8, 2003
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This review is from: The Strategy of Conflict (Paperback)
Since its first publication in 1960, the strategy of Conflict is still relevant today. His concepts of strategic moves and random strategy can still be applied to the increasing complicated international affairs. It's definitely a timeless classic for game theoretical study of international relations.
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5 of 6 people found the following review helpful
4.0 out of 5 stars still captivating and relveant, August 20, 2009
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This review is from: The Strategy of Conflict (Paperback)
By far the easiest to read and most conversational of all the game theory books I've read (which are several). Despite being written a 20 plus years ago, still relevant, accurate and at times profound. Some college international relations classes still use this text I recently discovered from a friend. I recommend this text as an essential primer into game theory/political strategy over anything else. Once you tackle this perhaps you will be ready for John Von Neumann.
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1 of 1 people found the following review helpful
4.0 out of 5 stars Important, but Overly Technical in Many Areas, July 12, 2013
In international affairs there is both mutual dependence and opposition. Pure conflict is a special case - a war of complete extermination. 'Winning' is not winning relative to one's adversary, but gaining relative to one's own value system - possibly through bargaining. Strategy is not concerned with efficient application of force, rather exploitation of potential force. Some outcomes could be mutually advantageous. Bargaining may involve threats, or mutual benefits.

Threats have to be credible to be effective, and that credibility may depend on the associated costs and risks. Threats can be made credible by stretching a 'trip wire' across the enemy's path of advance, or making fulfillment a matter of national honor and prestige. The rationality of one's adversary is pertinent to the efficiency of a threat - madmen often cannot be controlled by threats. The efficiency of a threat may depend on the alternatives available to a potential enemy - if he is not to react like a trapped lion he must left some tolerable recourse. The threat of all-out retaliation gives an enemy, should he choose not to heed it, every incentive to initiate his transgression with an all-out strike on us, forcing him to choose between extremes. The threat of massive destruction may deter an enemy only with an implicit promise of non-destruction if he complies - too great a capacity to strike him by surprise may induce him to strike first.

How does one become committed to an act he'd otherwise be known to shrink from, given that if a commitment makes the threat credible enough to be effective it need not be carried out? Irrationality can imply a disorderly and inconsistent value system, faulty calculation, an inability to receive messages or communicate effectively, or the collective nature of a decision among individuals lacking identical values and whose organizational arrangements and communication systems do not cause them to act like a single entity.

Limitations on the number of missiles are more stabilizing the larger the number permitted. This is because the greater the number on both sides, the larger the number left over for retaliation should the other side strike first. Secondly, the larger the numbers on both sides, the greater must be the absolute and proportionate increase on either side needed to assure that the other's leftover missiles would be less than some specified number after being attacked. Thus, the difficulty of one side's cheating (concealing, breaking the pact and racing to build more) is more than proportionately enhanced by an increase in the starting figures of both sides.

Bottom Line: Excellent points. However, the book would be immeasurably enhanced by revisions that incorporated examples from history (eg. how the U.S. likely inadvertently encouraged both the Korean War and Gulf War I by not adequately communicating its position, how the Spanish-American War began via misinformation), as well as reference to various negotiations on nuclear-weapon limitations and the Russian opposition to missile-defense systems.
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5.0 out of 5 stars Great book on business and more, August 22, 2013
By 
John Miewald (Carlsbad, US, Canada) - See all my reviews
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This review is from: The Strategy of Conflict (Paperback)
I am surprised more people are not familiar with this book. It is valuable for so just about every profession imaginable, especially anything involving negotiation.
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3.0 out of 5 stars hard material to, August 22, 2014
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This review is from: The Strategy of Conflict (Paperback)
hard material to comprehend
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49 of 81 people found the following review helpful
4.0 out of 5 stars NOBLE PRIZE WINNER ON CONFLICT, October 10, 2005
This review is from: The Strategy of Conflict (Paperback)
The 2005 Nobel Prize for Economics was awarded to Robert Aumann and Thomas C. Schelling. Schelling is professor of Economics at the University of Maryland and applied game theory to conflict. His focus was on the weapons issues but his ideas have been applied to a host of business issues.

In this review, we will apply some of Shelling's concepts to how companies fire employees.

Schelling says "uncertain retaliation is more efficient than certain retaliation" when bargaining and "the capability to retaliate is more useful than the ability to defend." Now let's get practical.

GOODBYE SCENARIO

As a verb, "goodbye" is the act of parting. It is also an acknowledgement of parting. A goodbye scenario assumes that once employees physically leave the building, they will never be a factor for the company's future. The relationship was transactional and the transaction is now over.

If the firm defines the termination as a goodbye scenario, the firm should be guided by a business model that says, "What's the least expensive way of terminating this relationship?" And Board members should ask tough questions about paying too much.

AUWIEDERSEHEN SCENARIO

"Auwiedersehen" is German for "Until we meet again." It has a more open-ended quality than the English "goodbye." In an auwiedersehen scenario, the assumption is that once employees physically leave the building, they may continue to be a factor in the firm's future. But it is unclear what that factor may be.

After their non-compete contracts are over, they may join a smaller competitor and become potential allies or opponents in your firm's efforts to develop strategic alliances or acquire the firm.

They may join firms that touch your industry and become potential referral sources of new business for you or a potential source of caution to others about using your company.

They may attend alumni programs at their schools and encourage/discourage graduates from joining your firm.

Each of these scenarios assumes capability of retaliation plus uncertainty of retaliation.

The best practical defense in terminating employees under these conditions is "Treat people with dignity on the way out because the assured costs of such positive treatment are less than the potential downside retaliatory risks.

AUWIEDERSEHEN VS IT'S NICE TO BE NICE

We work with companies that treat departing leaders with dignity
on the grounds that "it is good public relations and good for morale if we help former employees achieve a `soft landing.'" This positive rationale works only in cultures supportive of such a rationale.

The Schelling rationale does not depend on an organizion having a specific culture for treating people with dignity.

It develops a contingency approach to management based on a risk assessment.

There may be times when a "goodbye" scenario does indeed make good sense. There are other times when "auwiedersehen" makes better economic sense.

In applying Professor Schelling's theories, management's failure to take defensive measures with those possessing abilities and options to retaliate is is just bad economics. One sees it at work every day.

(...)
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The Strategy of Conflict
The Strategy of Conflict by Thomas C. Schelling (Paperback - May 15, 1981)
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