College Park -- Thomas C. Schelling, professor emeritus at the University of Maryland, was awarded the Nobel Prize in economics yesterday for his lifelong work in using a branch of mathematics known as game theory to analyze human behavior in areas ranging from nuclear deterrence to racial segregation.
Schelling - who joined the faculty in College Park in 1990 and retired from teaching two years ago - shared the $1.3 million prize with Robert J. Aumann, a mathematician at Hebrew University of Jerusalem.
In announcing the prize early yesterday, the Royal Swedish Academy of Sciences, which administers the Nobel Prizes, said the work of the two men has "contributed to our understanding of conflict and cooperation."
"Their work has transformed the social sciences far beyond the boundaries of economics," the academy said in a statement. "Aumann's and Schelling's research continues to shape the debate on the formation of social institutions."
Game theory derives its name from the mathematical study of board and pen-and-paper games, but has been shown to apply to military, economic and social actions. It is a way of determining different strategies that may be employed when the options of each party or player are dependent on those of the others.
Among its practitioners are John Nash, a Princeton mathematician and 1994 Nobel Prize winner in economics whose life and work was chronicled in the movie A Beautiful Mind.
The 84-year-old Schelling, who was feted by colleagues and administrators at a champagne reception on campus, made no attempt to hide his delight.
"If I am looking too pleased, I can't help it," he said as he stepped before the microphone at a late-morning news conference where he was loudly applauded on several occasions.
University officials, who have been striving for years to boost the profile of the university and put it in the top tier of the nation's public universities, were equally gleeful.
The Nobel Prize would "create a halo around the institution" enabling the university to attract high-performance students and recruit more high-powered faculty, said university system Chancellor William E. Kirwan. When he was president of the university, Kirwan hired Schelling to teach in the department of economics and the school of public policy.
Although Schelling and Aumann shared the prize, they approached the subject of analyzing conflict and cooperation from different perspectives and were honored for independent work.
A former official in the administration of President Harry S. Truman in the late 1940s and early 1950s, Schelling laid out his vision of the field in his 1960 book The Strategy of Conflict, published at the height of the Cold War.
In that book, he analyzed bilateral bargaining. He pointed out that it could be an advantage to worsen one's options to elicit concessions, as when a general burns the bridges behind his troops as a way of demonstrating to the enemy that he will not retreat.
That book and two others, also published in the 1960s, "had a profound effect on military theorists and practitioners in the Cold War era, played a major role in establishing `strategic studies' as an academic field of study and may well have contributed significantly to deterrence and disarmament among the super powers," the Swedish academy said in a statement.
U.S. scholars seconded the importance of Schelling's work.
"The word that immediately comes to mind is seminal,' said Robert A. Levine, a consultant at the Rand Corp., a well-known California think tank.
"They were really the first conceptual frameworks from which a lot of policy stemmed," said Levine, who had Schelling as a thesis adviser at Yale University in the 1950s.
Others say Schelling's work is still relevant in today's world.
Michael O'Hanlon, a security expert at the Brookings Institution, said that China might be willing to initiate a nuclear war over control of Taiwan. "Schelling would help you understand why it was not ridiculous to worry about," O'Hanlon said.
Because of the influence of his work in such areas as arms control and nuclear deterrence, Schelling was repeatedly asked yesterday about the current state of international affairs.
He declined to comment on the Iraq war, but said that deterrence would still be an important part of a world that includes terrorists and possibly smaller nuclear powers.
"I have a hunch that pretty soon we're going to find deterrence is alive and well," he said.
A new social science
In later work, Schelling was the first to examine the "tipping point" of neighborhoods because of the preferences of people to live with those of their own race.
That work helped spawn a new field of social science study, called agent-based modeling, on how people make decisions based on the decisions of others, said Steven Fetter, dean of Maryland's School of Public Policy.
"It's like Sim City," he said, referring to the popular computer game.
Schelling has also studied personal behaviors, such as addictions.