Symposium Book Club – Conversation with Sanda Kaufman About Schelling’s Strategy of Conflict

This is part of the “virtual book club” discussing readings for the symposium at the University of Missouri on October 7:  Moving Negotiation Theory from the Tower of Babel Toward a World of Mutual Understanding.

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JohnSanda, I just read much of Schelling’s Strategy of Conflict (1960).  Before I talk about the negotiation and dispute resolution aspects, I must note that I was struck by the concluding chapter focusing on nuclear deterrence between the US and Soviet Union.   It reminded me of the films Dr. Strangelove and Fail-Safe dealing with the problems of managing the “balance of terror,” as it was known. (In fact, Schelling talked with Strangelove producer Stanley Kubrick during the planning of the film.)

The book seemed like a long prelude to this final analysis in which Schelling argued that to provide stability, it was important for both sides to have nuclear weapons that would survive a surprise first-strike by the other side.  He obviously wanted to prevent nuclear war and so this is a paradoxical conclusion growing out of his analysis.

I went to elementary school where we had drills to respond to nuclear attacks, so this discussion brought me back to that remarkable time, which I suspect most younger people would have a hard time imagining.

I think I get a better sense of why Schelling’s book is considered a treatise on decision-making, though that term still seems a bit confusing for me.  He focuses on interdependent counterparts who make decisions trying to win a conflict, in part, by second-guessing each other.  He defines strategy as the exploitation of potential force, not the efficient application of force.  In other words, strategy is designed to deter a counterpart from taking an adverse action rather than forcing them to do so.  (I thought it was amusing how he discusses challenges of deterring criminals and children from certain behavior as being similar.)

He writes that deterrence “is concerned with influencing the choices that another party will make, and doing it by influencing his expectations of how we will behave.  It involves confronting him with evidence for believing that our behavior will be determined by his behavior”  (p. 13).

To do so, a party must make credible threats and/or promises.  Whether counterparts deem them to be credible depends on various factors, such as the payoffs for the different options, the parties’ ability to perceive the options, the mixture of conflicting and common interests, the communication involved (if any), the “rationality” of the parties, the level of trust, mechanisms to enforce threats and promises, and involvement of third parties, among other things.

Although Schelling assumes that most situations involve a mixture of common and conflicting interests, he focuses only on the distributional aspect of bargaining, which is “guided mainly by expectations about what the [counterpart] will accept” ( p. 21).  He assumes that parties agree when one side concludes that the other will not make further concessions.

Chapter 2, “An Essay on Bargaining,” analyzes various tactics that negotiators use to reach agreement through the use of bargaining power – convincing the counterpart that an offer is one’s best offer.  Chapter 4, “Toward a Theory of Interdependent Decision,” argues that game theory (at least at that point) assumes zero-sum (“fixed-sum”) situations, which he doesn’t find very useful in the real world as even enemies usually have some common interests (in “mixed motive” or “coordination” games).  Much of this chapter focuses on how parties can coordinate “tacitly,” i.e., without communication.   Often, this is done through orientation through logical “focal points,” which we might think of as possible defaults.

The rest of the book is pretty technical and I didn’t have the motivation to wade through it, at least not now.

I assume that this is an accurate summary as far as it goes, would you agree?  Are there important concepts or principles in the book that this summary omits?

Most importantly, given this summary and anything you would add to it, can you say more why this book appeals to you so much?

Sanda:  Very good summary and it also describes well the decision-analytic approach.  Note that we have become sensitive to words and have tacitly incorporated certain values in our talk of negotiations, so Schelling’s language might grate today but it is no less relevant to many conflicts we are living through these days.

It focuses on interests, wherever they may come from, instead of assuming anything about why people want what they want, or telling them what they should want.  That is because his approach allows each side to incorporate all that into their objectives, and he takes it from the point where those objectives have been set.  He is in the position of a one-sided adviser (much like a lawyer), telling a party:  now given what you want, here is how you should think about your situation and this is how you should prepare your strategy given what the other party is doing or is likely to do, here is how the other party might respond, and then here is your next step.

I will take step back and say that from the decision making perspective, anyone contemplating a decision will take into account four variables: (1) preferences, (2) perceived alternatives, (3) perceived likelihoods (e.g., that certain actions will yield certain results, or that other parties will follow through on agreements – anything that is a guess at decision time), and (4) perceived states of the world (stuff that we don’t control but that will affect our choices in the moment, such as political events or the economic situation).  Preferences (or interests) incorporate our past experiences, knowledge, values – everything that leads us to seek certain outcomes.  Alternatives and likelihoods are “perceived” because people act on their perceptions and beliefs whether or not they correspond to reality.

Now back to Schelling.  What he prescribes is based on this understanding of decision ingredients.  Negotiations are then mutual persuasion efforts aiming to converge on an alternative in the face of different preferences and perceptions.

I should note that if we were to look at various conflicts, we would notice that they are almost always mixes of differences along the four dimensions I mentioned.  However, in many situations one dimension might dominate.  To take the example of environmental conflicts, my research focus, they are often dominated by differences in likelihoods (scientific assessments of environmental effects of our actions) as well as perceived alternatives, even when the objectives are largely shared.  Such conflicts, even when protracted, are sometimes alleviated by trusted information. Some conflicts are dominated by value differences (e.g., abortion, gay rights).  They are quite resistant to resolution because values are rarely if ever susceptible to information and persuasion.

All this assumes that the parties are negotiating and exchanging information in an attempt to resolve their conflicts.  But what if they don’t?  What if they communicate only through their (observable) actions?

The Cold War was such a situation (very much like a repeated Prisoners’ Dilemma) and that is why Schelling proposed the mutual deterrence strategy.

Interestingly, this is also an approach Steven Pinker described in The Better Angels of Our Nature for conflicts (such as gang wars) where there is no institutional backup (gangs are outside the law and unlikely to sue each other or negotiate) and all you have are the others’ observed actions.  Then, Pinker argued, it makes a lot of sense to engage in the credible threats strategy described by Schelling and indeed that is what they do.  They seek to instill fear through demonstrative cruel actions, so the other gangs know that attacking is going to draw a fierce, ruthless and costly response.

Many societies in the past, before the advent of states and of the rule of law, adopted similar strategies.  The advantage is predictability.  If you know with high probability the awful consequences of an attack, peace is arguably more likely to reign than if you are not sure or even predict (perhaps wrongly) that the other is weak and you have a good chance of prevailing.  Violent conflagrations are then more likely. In such contexts, it’s all about credible threats.

I’d conclude by saying that context matters: although we can have seemingly general discussions about conflict, and although some key aspects are shared, it pays to examine the specifics of families of conflicts.  For example, environmental conflicts are quite unlike gang wars. International disputes share some characteristics with both.  Organizational and inter-organizational conflicts are yet another story.  Nevertheless, Schelling’s prescriptions are adaptable to each of these contexts.

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