Robert Aumann and Thomas Schelling
Citation: For having enhanced our understanding of conflict and cooperation through game-theory analysis.
The key idea
Aumann: repeated games support cooperation via the Folk Theorem; common knowledge is more subtle than it seems. Schelling: focal points solve coordination problems; tipping models explain segregation; deterrence requires credible commitment.
The explanation
Aumann's repeated-game analysis explained how cooperation arises without external enforcement when interactions repeat indefinitely. His work on common knowledge (1976) showed that 'I know that you know that I know' has surprising implications for agreement and trade. Schelling's Strategy of Conflict (1960) introduced focal points, credible commitment, and tipping-point dynamics into economics and political science.
Why Africa should care
Schelling's tipping-point model explains residential and ethnic segregation across African cities — Lagos, Nairobi, Johannesburg. Aumann's repeated-game framework explains why African business cartels can sustain collusion indefinitely without explicit communication. Schelling's commitment-and-deterrence logic underlies African peace-treaty design and AU mediation strategy.
How to use it
When trying to break a stable but undesirable equilibrium (corruption, cartel pricing, low trust), Schelling's tipping logic says you need to coordinate beliefs across enough agents simultaneously. Atomistic incremental policy rarely shifts the equilibrium.
Canonical works
- Thomas C. Schelling (1960) "The Strategy of Conflict" Harvard University Press
- Robert J. Aumann (1976) "Agreeing to Disagree" Annals of Statistics
- Thomas C. Schelling (1978) "Micromotives and Macrobehavior" W. W. Norton
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