Nobel Prize Winner's Work Influenced Planning

The 2005 Nobel Prize in economic sciences is awarded to theorist Thomas C. Schelling of the University of Maryland for his work in game-theory.
October 12, 2005, 11am PDT | Chris Steins | @urbaninsight
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The work of Thomas Schelling is a mainstay of planning theory classes. Schelling's game theory approach, applied to traffic jams and housing segregation, is disarmingly simple and overwhelming human. His use of words instead of equations was both a throwback and a precedent for a more humanist, postmodern scientific rhetoric of persuasion.

Schelling's book, Micromotives and Macrobehavior, was preceded by an even better article in The Public Interest, "The Ecology of Micromotives". There he described in everyday terms a series of allegories for market failure, and why self-serving individual behavior ended in results not preferred by anyone. He recommended better communication, restructured market incentives, if possible, and authoritarian command and control devices, where needed, such as the traffic light. Written in 1971, that work predated the major revolutions in planning theory.

From the WSJ article:

Mr. Schelling's ... "thinking led to important insights in areas ranging from nuclear war to figuring out meeting places to traffic jams to racial segregation. His specialty was understanding the behavior of real humans, and game theory was one of his tools.

...Another Schelling analogy was his discussion of where you would meet someone if you both knew you were meeting in New York on a particular day but hadn't thought to set a time and place. This led to his concept of the 'focal point.'

...One such puzzle is why so many neighborhoods end up being racially segregated, even though the people in the neighborhoods, black or white, don't seem particularly racist. In his book "Micromotives and Macrobehavior," Mr. Schelling lays out an exercise using coins, showing how an integrated neighborhood can become quite segregated as long as each person wants at least one third of the neighbors to be like him. When one person moves to get a preferred set of neighbors, Mr. Schelling explains, it causes a chain reaction that settles down only when the neighborhood is fairly segregated. This might sound implausible, which is why Mr. Schelling, always the empiricist, recommends that the reader carry out his own simulation."

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Thanks to Dowell Myers

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Published on Thursday, October 13, 2005 in The Wall Street Journal
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