BARGAINING, COMMUNICATION, AND LIMITED WAR

23

house and walk to it, they walk together a greater distance than they needed to, but the closer one may still have come off better than if he had had to argue it out with the other.

This last case illustrates that it may be to the advantage of one to be unable to communicate. There is room here for a motive to destroy communication or to refuse to collaborate in advance on a method of meeting if one is aware of his advantage and confident of the "solution" he foresees. In one variant of the writer's test, A knew where B was, but B had no idea where A was (and each knew how much the other knew). Most of the recipients of the B-type questionnaire smugly sat tight, enjoying their ignorance, while virtually all the A-questionnaire respondents grimly acknowledged the inevitable and walked all the way to B. Better still may be to have the power to send but not to receive messages: if one can announce his position and state that his transmitter works but not his receiver, saying that he will wait where he is until the other arrives, the latter has no choice. He can make no effective counteroffer, since no counteroffer could be heard.³

The writer has tried a sample of conflicting-interest games on a number of people, including games that are biased in favor of one party or the other; and, on the whole, the outcome suggests the same conclusion that was reached in the purely co-operative games. All these games require co-ordination; they also, however, provide several alternative choices over which the two parties' interests differ. Yet, among all the available options, some particular one usually seems

to be the focal point for co-ordinated choice, and the party to whom it is a relatively unfavorable choice quite often takes it simply because he knows that the other will expect him to. The choices that cannot co-ordinate expectations are not really "available" without communication. The odd characteristic of all these games is that neither rival can gain by outsmarting the other. Each loses unless he does exactly what the other expects him to do. Each party is the prisoner or the beneficiary of their mutual expectations; no one can disavow his own expectation of what the other will expect him to expect to be expected to do. The need for agreement overrules the potential disagreement, and each must concert with the other or lose altogether. Some of these games are arrived at by slightly changing the problems given earlier, as we did for the map problem by supposing that walking is onerous.

1. A and B are to choose "heads" or "tails" without communicating. If both choose "heads," A gets $3 and B gets $2; if both choose "tails," A gets $2 and B gets $3. If they choose differently, neither gets anything. You are A (or B); which do you choose? (Note that if both choose at random, there is only a 50-50 chance of successful coincidence and an expected value of $1.25 apiece—less than either $3 or $2.)

2. You and your two partners (or rivals) each have one of the letters A, B, and C. Each of you is to write these three letters, A, B, and C, in any order. If the order is the same on all three of your lists, you get prizes totaling $6, of which $3 goes to the one whose letter is first on all three lists, $2 to the one whose letter is second, and $1 to the person whose letter is third. If the letters are not in identical order on all three lists, none of you gets anything. Your letter is A (or B, or C); write here the three letters in the order you choose:

³ This is an instance of the general paradox that what is impotence by ordinary standards may, in bargaining, be a source of "strength." The general principle is illustrated at length in a previous article (3).

---, ---, ---.

24

THOMAS C. SCHELLING

3. You and your partner (rival) are each given a piece of paper, one blank and the other with an "X" written on it. The one who gets the "X" has the choice of leaving it alone or erasing it; the one who gets the blank sheet has the choice of leaving it blank or writing an "X" on it. If, when you have made your choices without communicating, there is an "X" on only one of the sheets, the holder of the "X" gets $3 and the holder of the blank sheet gets $2. If both sheets have "X's" or both sheets are blank, neither gets anything. Your sheet of paper has the original "X" on it; do you leave it alone or erase it? (Alternate: your sheet of paper is the blank one; do you leave it blank or write an "X"?)

4. You and your partner (rival) are to be given $100 if you can agree on how to divide it without communicating. Each of you is to write the amount of his claim on a sheet of paper; and if the two claims add to no more than $100, each gets exactly what he claimed. If the two claims exceed $100, neither of you gets anything. How much do you claim? $______.

5. You and your partner are each to pick one of the five letters, K, G, W, L, or R. If you pick the same letter, you get prizes; if you pick different letters, you get nothing. The prizes you get depend on the letter you both pick; but the prizes are not the same for each of you, and the letter that would yield you the highest prize may or may not be his most profitable letter. For you the prizes would be as follows:

<table><tr><td>K</td><td>$4</td><td>L</td><td>$2</td></tr><tr><td>G</td><td>$3</td><td>R</td><td>$5</td></tr><tr><td>W</td><td>$1</td><td></td><td></td></tr></table>

You have no idea what his schedule of prizes looks like. You begin by proposing to him the letter R, that being your best letter. Before he can reply, the master-of-ceremonies intervenes to say that you were not supposed to be allowed to communicate and

that any further communication will disqualify you both. You must simply write down one of the letters, hoping that the other chooses the same letter. Which letter do you choose? (Alternate formulation shows schedule of K-$3, G-$1, W-$4, L-$5, R-$2, and has the "other" party make an initial proposal of the letter R before communication is cut off.)

6. Two opposing forces are at the points marked X and Y in a map similar to the one in Figure 1. The commander of each force wishes to occupy as much of the area as he can and knows the other does too. But each commander wishes to avoid an armed clash and knows the other does too. Each must send forth his troops with orders to take up a designated line and to fight if opposed. Once the troops are dispatched, the outcome depends only on the lines that the two commanders have ordered their troops to occupy. If the lines overlap, the troops will be assumed to meet and fight, to the disadvantage of both sides. If the troops take up positions that leave any appreciable space unoccupied between them, the situation will be assumed "unstable" and a clash inevitable. Only if the troops are ordered to occupy identical lines or lines that leave virtually no unoccupied space between them will a clash be avoided. In that case, each side obtains successfully the area it occupies, the advantage going to the side that has the most valuable area in terms of land and facilities. You command the forces located at the point marked X (Y). Draw on the map the line that you send your troops to occupy.

7. A and B have incomes of $100 and $150 per year, respectively. They are notified of each other's income and told that they must begin paying taxes totaling $25 per year. If they can reach agreement on shares of this total, they may share the annual tax bill in whatever manner they agree

CONFLICT RESOLUTION VOLUME I NUMBER 1

25

on. But they must reach agreement without communication; each is to write down the share he proposes to pay, and if the shares total $25 or more, each will pay exactly what he proposed. If the proposed shares fail to add up to $25, however, each will individually be required to pay the full $25, and the tax collectors will keep the surplus. You are A (B); how much do you propose to pay? $______.

8. A loses some money, and B finds it. Under the house rules, A cannot have his money back until he agrees with the finder on a suitable reward, and B cannot keep any except what A agrees to. If no agreement is reached, the money goes to the house. The amount is $16, and A offers $2 as a reward. B refuses, demanding half the money for himself. An argument ensues, and the house intervenes, insisting that each write his claim, once and for all, without further communication. If the claims are consistent with the $16 total, each will receive exactly what he claims; but if together they claim more than $16, the funds will be confiscated by the house. As they sit pondering what claims to write, a well-known and respected mediator enters and offers to help. He cannot, he says, participate in any bargaining, but he can make a "fair" proposal. He approaches A and says, "I think a reasonable division under the circumstances would be a 2-1 split, the original owner getting two-thirds and the finder one-third, perhaps rounded off to $11 and $5, respectively. I shall make the same suggestion to him." Without waiting for any response, he approaches the finder, makes the same suggestion, and says that he made the same suggestion to the original owner. Again without waiting for any response, he departs. You are A (B); what claim do you write?

The outcomes in the writer's informal sample are given in the footnote.⁴ In those

problems where there is some asymmetry between "you" and "him," i.e., between A and B, the A formulations were matched with the B formulations in deriving the "outcome." The general conclusion, as given in more detail in the footnote, is that the participants can "solve" their problem in a substantial proportion of the cases; they certainly do conspicuously better than any chance methods would have permitted, and even the disadvantaged party in the biased games permits himself to be disciplined by the message that the game provides for their co-ordination.

⁴ In the first problem, 16 out of 22 A's and 15 out of 22 B's chose heads. Given what the A's did, heads was the best answer for B; given what the B's did, heads was the best answer for A. Together they did substantially better than at random; and, of course, if each had tried to win $3, they would all have scored a perfect zero. Problem 2, however, which is logically similar to 1 but with a more compelling structure, showed 9 out of 12 A's, 10 out of 12 B's, and 14 out of 16 C's, successfully co-ordinating on ABC. (Of the remaining 7, incidentally, 5 discriminated against themselves in departing from alphabetical order, all to no avail.) Problem 3, which is structurally analogous to 1, showed 18 out of 22 A's concerting successfully with 14 out of 19 B's, giving A the $3 prize. In problem 4, 36 out of 40 chose $50. (Two of the remainder were $49 and $49.99.) In problem 5 the letter R won 5 out of 8 votes from those who had proposed it, and 8 out of 9 votes from those who were on the other side. In problem 6, 14 of 22 X's and 14 of 23 Y's drew their boundaries exactly along the river. The "correctness" of this solution is emphatically shown by the fact that the other 15, who eschewed the river, produced 14 different lines. Of 8 × 7 possible pairs among them, there were 55 failures and 1 success. Problem 7 showed 5 out of 6 of those with incomes of $150 and 7 out of 10 of those with incomes of $100 concerting on a 15-10 division of the tax. In problem 8 both those who lost money and those who found it, 8 and 7 persons, respectively, unanimously concerted on the mediator's suggestion of an even $5 reward.

26

THOMAS C. SCHELLING

The "clues" in these games are diverse. Heads apparently beat tails, though not very regularly on the first test, through some kind of conventional priority, similar to the convention that dictates A, B, C, though not nearly so strong. The original X beats the blank sheet, apparently because the "status quo" is more obvious than change. The letter R wins because there is nothing to contradict the first offer. Roads might seem, in principle, as plausible as rivers, especially since their variety permits a less arbitrary choice. But, precisely because of their variety, the map cannot say which road; so roads must be discarded in favor of the unique and unambiguous river. (Perhaps in a symmetrical map of uniform terrain, the outcome would be more akin to the 50-50 split in the $100 example—a diagonal division in half, perhaps—but the irregularity of the map rather precludes a geometrical solution.)

The tax problem illustrates a strong power of suggestion in the income figures. The abstract logic of this problem is identical with that of the $100 division; in fact, it could be reworded as follows: each party pays $25 in taxes, and a refund of $25 is available to be divided among the two parties if they can agree on how to divide it. This formulation is logically equivalent to the one in problem 7, and, as such, it differs from problem 4 only in the amount of $25 instead of $100. Yet the inclusion of income figures, just by suggesting their relevance and making them prominent in the problem, shifts the focal point substantially to a 10-15 split rather than 12.5-12.5. And why, if incomes are relevant, is a perfectly proportional tax so obvious, when perhaps there are grounds for graduated rates? The answer must be that no particular graduation of rates is so obvious as to go without saying; and, if speech is impossible, by default the uniquely simple and recognizable prin-

ciple of proportionality has to be adopted. First, the income figures take the initial plausibility away from a 50-50 split; then the simplicity of proportionality makes 10-15 the only one that could possibly be considered capable of tacit recognition. The same principle is displayed by an experiment in which question 7 was deliberately cluttered up with *additional* data—on family size, spending habits, and so on. Here the unique attraction of the income proportionate split apparently became so diluted that the preponderant reply from both the high-income and the low-income respondents was a simple 50-50 division of the tax. The refined signal for the income proportionate split was drowned out by "noise," and the cruder signal was all that came through.

Finally, problem 8 is again logically the same as problem 4, the amount being $16 available for two people if they can write claims that do not exhaust the amount. But the institutional arrangement is discriminatory; finder and loser do not have a compelling equality in any moralistic or legalistic sense, so the 50-50 split seems not quite obvious. The suggestion of the mediator provides the only other signal that is visible; its potency as a co-ordinator is seen even in the rounding to $11 and $5, which was universally accepted.

In each of these situations the outcome is determined by something that is fairly arbitrary. It is not a particularly "fair" outcome, from either an observer's point of view or the points of view of the participants. Even the 50-50 split is arbitrary in its reliance on a kind of recognizable mathematical purity; and if it is "fair," it is so only because we have no concrete data by which to judge its unfairness, such as the source of the funds, the relative need of the rival claimants, or any potential basis for moral or legal claims. Splitting the difference in an argument over

27

kidnap ransom is not particularly "fair," but it has the mathematical qualities of problem 4.

If we ask what determines the outcome in these cases, the answer again is in the co-ordination problem. Each of these problems requires co-ordination for a common gain, even though there is rivalry among alternative lines of common action. But, among the various choices, there is usually one or only a few that can serve as co-ordinator. Take the case of the first offer in problem 5. The strongest argument in favor of R is the rhetorical question, "If not R, what then?" There is no answer so obvious as to give more than a random chance of concerting, even if both parties wanted to eschew the letter R after the first offer was made. To illustrate the force of this point, suppose that the master-of-ceremonies in that problem considered the first offer already to have spoiled the game and thought he might confuse the players by announcing the reversal of their prize schedules. A will get whatever prize B would have gotten, and B will get the prizes shown in A's schedule in problem 5. Does the original offerer of R have any reason to change his choice? Or suppose that the master-of-ceremonies announced that the prizes would be the same, no matter what letter were chosen, so long as they both picked the same letter. They will still rally to R as the only indicated means of co-ordinating choices. If we revert to the beginning of this game and suppose that the original proposal of R never got made, we might imagine a sign on the wall saying, "In case of doubt always choose R; this sign is visible to all players and constitutes a means of co-ordinating choices." Here we are back at the man and his wife in the department store, whose problems are over when they see a conspicuous sign that says, "The management suggests that all persons who become separated

meet each other at the information booth in the center of the ground floor." Beggars cannot be choosers about the source of their signal or about its attractiveness compared with others that they can only wish were as conspicuous.

The irony would be complete if, in game 5, your rival knew your prize schedule and you did not know his (as was the case in a variant of question 5 used in some questionnaires). Since you have no basis for guessing his preference and could not even do him a favor or make a "fair" compromise if you wished to, the only basis for concerting is to see what message you can both read in your schedule. Your own preferred letter seems the indicated choice; it is hard to see why to pick any other or which other to pick, since you have no basis for knowing what other letter is better for him than R itself. His knowledge of your preference, combined with your ignorance of his and the lack of any alternative basis for co-ordination, puts on him the responsibility of simply choosing in your favor. (This, in fact, was the preponderant result among the small sample tested.) It is the same situation as when only one parachutist knew where the other was.⁵

Explicit Bargaining

The concept of "co-ordination" that was developed previously for tacit bargaining does not seem directly applicable to explicit bargaining. There is no apparent need for intuitive rapport when speech can be used; and the adventitious clues that co-ordinated thoughts and influenced the outcome in the tacit case revert to the status of incidental details.

Yet there is abundant evidence that some

⁵ And it is another example of the power that resides in "weakness," which was commented on in an earlier footnote.

28

THOMAS C. SCHELLING

such influence is powerfully present even in explicit bargaining. In bargains that involve numerical magnitudes, for example, there seems to be a strong magnetism in mathematical simplicity. A trivial illustration is the tendency for the outcomes to be expressed in "round numbers"; the salesman who works out the arithmetic for his "rock-bottom" price on the automobile at $2,507.63 is fairly pleading to be relieved of $7.63. The frequency with which final agreement is precipitated by an offer to "split the difference" illustrates the same point, and the difference that is split is by no means always trivial. More impressive, perhaps, is the remarkable frequency with which long negotiations over complicated quantitative formulas or *ad hoc* shares in some costs or benefits converge ultimately on something as crudely simple as equal shares, shares proportionate to some common magnitude (gross national product, population, foreign-exchange deficit, etc.), or the shares agreed on in the previous negotiation.⁶

Precedent seems to exercise an influence that greatly exceeds its logical importance or legal force. A strike settlement or an international debt settlement often sets a "pattern" that is followed almost by default in subsequent negotiations. Sometimes, to be sure, there is a reason for a measure of uniformity, and sometimes there is enough similarity in the circumstances to explain similar outcomes; but more often it seems that there is simply no heart left in the bargaining when it takes place under the

⁶ From a great variety of formulas proposed for the contributions to UNRRA, the winner that emerged was a straight 1 per cent of gross national product—the simplest conceivable formula and the roundest conceivable number. This formula was, to be sure, the preferred position of the United States during the discussion; but that fact perhaps adds as much to the example as it detracts from it.

shadow of some dramatic and conspicuous precedent.⁷ In similar fashion, mediators often display a power to precipitate agreement and a power to determine the terms of agreement; their proposals often seem to be accepted less by reason of their inherent fairness or reasonableness than by a kind of resignation of both participants. "Fact-finding" reports may also tend to draw expectations to a focus, by providing a suggestion to fill the vacuum of indeterminacy that otherwise exists: it is not the facts themselves, but the creation of a specific suggestion, that seems to exercise the influence.

There is, in a similar vein, a strong attraction to the *status quo ante* as well as to natural boundaries. Even parallels of latitude have recently exhibited their longevity as focal points for agreement. Certainly, there are reasons of convenience in using rivers as the agreed stopping place for troops or using old boundaries, whatever their current relevance; but often these features of the landscape seem less important for their practical convenience than for their power to crystallize agreement.

These observations would be trivial if they meant only that bargaining results were *expressed* in simple and qualitative terms or that minor accommodations were made to round off the last few cents or miles or people. But it often looks as though the ultimate focus for agreement did not just reflect the balance of bargaining powers but provided bargaining power to one side or the other. It often seems that a cynic could have predicted the outcome on the basis of some "obvious" focus for agreement, some strong suggestion contained in the situation itself, without much regard to the merits of

⁷ This and the preceding paragraph are illustrated by the speed with which a number of Middle Eastern oil-royalty arrangements converged on the 50-50 formula a few years after World War II.

29

the case, the arguments to be made, or the
pressures to be applied during the bargain-
ing. The "obvious" place to compromise fre-
quently seems to win by some kind of de-
fault, as though there is simply no rationale
for settling anywhere else. Or if the "nat-
ural" outcome is taken to reflect the relative
skills of the parties to the bargain, it may be
important to identify that skill as the ability
to set the stage in such a way as to give
prominence to some particular outcome that
would be favorable. The outcome may not
be so much conspicuously fair or conspic-
uously in balance with estimated bargaining
powers as just plain "conspicuous."

This conclusion may seem to reduce the
scope for bargaining skill, if the outcome is
already determined by the configuration of
the problem itself and where the focal point
lies. But perhaps what it does is shift the
locus where skill is effective. The "obvious"
outcome depends greatly on how the prob-
lem is formulated, on what analogies or
precedents the definition of the bargaining
issue calls to mind; on the kinds of data
that may be available to bear on the ques-
tion in dispute. When the committee begins
to argue over how to divide the costs, it is
already constrained by whether the terms
of reference refer to the "dues" to be shared
or the "taxes" to be paid, on whether a serv-
icing committee is preparing national-in-
come figures or balance-of-payments figures
for their use, on whether the personnel of
the committee brings certain precedents in-
to prominence by having participated per-
sonally in earlier negotiations, on whether
the inclusion of two separate issues on the
same agenda will give special prominence
and relevance to those particular features
that they have in common. Much of the skill
has already been applied when the formal
negotiations begin.⁸

If all this is correct, as it seems frequently
to the author to be, our analysis of tacit

bargaining may help to provide an under-
standing of the influence at work; and per-
haps the logic of tacit bargaining even pro-
vides a basis for believing it to be correct.
The fundamental problem in tacit bargain-
ing is that of co-ordination; we should in-
quire, then, what has to be co-ordinated in
explicit bargaining. The answer may be that
explicit bargaining requires, for an ultimate
agreement, some co-ordination of the partici-
pants' expectations. The proposition might
be as follows:

Most bargaining situations ultimately in-
volve some range of possible outcomes with-
in which each party would rather make a
concession than fail to reach agreement at
all. In such a situation any potential out-
come is one from which at least one of the
parties, and probably both, would have
been willing to retreat for the sake of agree-
ment, and very often the other party knows
it. Any potential outcome is therefore one
that either party could have improved by
insisting; yet he may have no basis for in-
sisting, since the other knows or suspects
that he would rather concede than do with-
out agreement. Each party's strategy is
guided mainly by what he expects the other
to accept or insist on; yet each knows that
the other is guided by reciprocal thoughts.
The final outcome must be a point from
which neither expects the other to retreat;
yet the main ingredient of this expectation
is what one thinks the other expects the first
to expect, and so on. Somehow, out of this

⁸ Perhaps another role for skill is contained in this general approach. If one is unsuccessful in getting the problem so formulated that the "obvious" outcome is near his own preferred position, he can proceed to confuse the issue. Find multiple definitions for all the terms and add "noise" to drown out the strong signal contained in the original formulation. The technique may not succeed; but in one of our income tax problems it certainly did.

30

THOMAS C. SCHELLING

fluid and indeterminate situation that seem-
ingly provides no logical reason for anybody
to expect anything except what he expects
to be expected to expect, a decision is
reached. These infinitely reflexive expecta-
tions must somehow converge on a single
point, at which each expects the other not
to expect to be expected to retreat.

If we then ask what it is that can bring
their expectations into convergence and
bring the negotiation to a close, we might
propose that it is the intrinsic magnetism of
particular outcomes, especially those that
enjoy prominence, uniqueness, simplicity,
precedent, or some rationale that makes
them qualitatively differentiable from the
continuum of possible alternatives. We could
argue that expectations tend not to converge
on outcomes that differ only by degree from
alternative outcomes but that people have
to dig in their heels at a groove in order to
make any show of determination. One has
to have a reason for standing firmly on a
position; and along the continuum of quali-
tatively undifferentiable positions one finds
no rationale. The rationale may not be strong
at the arbitrary "focal point," but at least it
can defend itself with the argument "If not
here, where?"

There is perhaps a little more to this need
for a mutually identifiable resting place. If
one is about to make a concession, he needs
to control his adversary's expectations; he
needs a recognizable limit to his own re-
treat. If one is to make a finite concession
that is not to be interpreted as capitulation,
he needs an obvious place to stop. A media-
tor's suggestion may provide it; or any other
element that qualitatively distinguishes the
new position from surrounding positions. If
one has been demanding 60 per cent and
recedes to 50 per cent, he can get his heels
in; if he recedes to 49 per cent, the other
will assume that he has hit the skids and
will keep sliding.

If some troops have retreated to the river
in our map, they will expect to be expected
to make a stand. This is the one spot to
which they can retreat without necessarily
being expected to retreat further, while, if
they yield any further, there is no place left
where they can be expected to make a de-
termined stand. Similarly, the advancing
party can expect to force the other to retreat
to the river without having his advance in-
terpreted as an insatiable demand for un-
limited retreat. There is stability at the river
—and perhaps nowhere else.

This proposition may seem intuitively
plausible; it does to the writer, and in any
event some kind of explanation is needed
for the tendency to settle at focal points.
But the proposition would remain vague and
somewhat mystical if it were not for the
somewhat more tangible logic of tacit bar-
gaining. The latter provides not only an
analogy but the demonstration that the nec-
essary psychic phenomenon—tacit co-ordina-
tion of expectations—is a real possibility and
even, in some contexts, a reliable one. The
"co-ordination" of expectations is analogous
to the "co-ordination" of behavior when
communication is cut off; and, in fact, they
both involve nothing more nor less than
intuitively perceived mutual expectations.
Thus the empirically verifiable results of
some of the tacit-bargaining games, as well
as the more logical role of co-ordinated ex-
pectations in that case, prove that expecta-
tions can be co-ordinated and that some of
the objective details of the situation can
exercise a controlling influence when the
co-ordination of expectations is essential.
Something is perceived by both parties when
communication is absent; it must still be
perceptible, though undoubtedly of lesser
force, when communication is possible. The
possibility of communication does not make
50-50 less symmetrical or the river less

31

unique or A B C a less natural order for
those letters.

If all we had to reason from were the
logic of tacit bargaining, it would be only a
guess and perhaps a wild one that the same
kind of psychic attraction worked in explicit
bargaining; and if all we had to generalize
from were the observation of peculiarly
"plausible" outcomes in actual bargains, we
might be unwilling to admit the force of
adventitious details. But the two lines of
evidence so strongly reinforce each other
that the analogy between tacit and explicit
bargaining seems a potent one.

To illustrate with the problem of agree-
ing explicitly on how to divide $100: 50-50
seems a plausible division, but it may seem
so for too many reasons. It may seem "fair";
it may seem to balance bargaining powers;
or it may, as suggested in this paper, simply
have the power to communicate its own in-
evitability to the two parties in such fashion
that each appreciates that they both appre-
ciate it. What our analysis of tacit bargain-
ing provides is evidence for the latter view.
The evidence is simply that if they had to
divide the $100 without communicating,
they could concert on 50-50. Instead of re-
lying on intuition, then, we can point to the
fact that in a slightly different context—the
tacit-bargaining context—our argument has
an objectively demonstrable interpretation.

To illustrate again: the ability of the two
commanders in one of our problems to rec-
ognize the stabilizing power of the river—
or, rather, their inability not to recognize it
—is substantiated by the evidence that if
their survival depended on some agreement
about where to stabilize their lines *and com-
munication were not allowed*, they probably
could perceive and appreciate the qualities
of the river as a focus for their tacit agree-
ment. So the tacit analogy at least demon-
strates that the idea of "co-ordinating expec-
tations" is meaningful rather than mystical.

Perhaps we could push the argument fur-
ther still. Even in those cases in which the
only distinguishing characteristic of a bar-
gaining result is its evident "fairness," by
standards that the participants are known
to appreciate, we might argue that the mor-
al force of fairness is greatly reinforced by
the power of a "fair" result to focus atten-
tion, if it fills the vacuum of indeterminacy
that would otherwise exist. Similarly, when
the pressure of public opinion seems to force
the participants to the obviously "fair" or
"reasonable" solution, we may exaggerate
the "pressure" or at least misunderstand the
way it works on the participants unless we
give credit to its power to co-ordinate the
participants' expectations. It may, to put it
differently, be the power of *suggestion*,
working through the mechanism described
in this paper, that makes public opinion or
precedent or ethical standards so effective.
Again, as evidence for this view, we need
only to suppose that the participants had to
reach ultimate agreement without commu-
nicating and visualize public opinion or
some prominent ethical standard as provid-
ing a strong suggestion analogous to the
suggestions contained in our earlier ex-
amples. The mediator in problem 7 is a
close analogy. Finally, even if it is truly the
force of moral responsibility or sensitivity
to public opinion that constrains the partici-
pants, and not the "signal" they get, we
must still look to the source of the public's
own opinion; and there, the writer suggests,
the need for a simple, qualitative rationale
often reflects the mechanism discussed in
this paper.

But, if this general line of reasoning is
valid, any analysis of explicit bargaining
must pay attention to what we might call
the "communication" that is inherent in the
bargaining situations, the signals that the
participants read in the inanimate details of
the case. And it means that tacit and ex-

32

THOMAS C. SCHELLING

plicit bargaining are not thoroughly separate concepts but that the various gradations from tacit bargaining up through types of incompleteness or faulty or limited communication to full communication all show some dependence on the need to co-ordinate expectations. Hence all show some degree of dependence of the participants themselves on their common inability to keep their eyes off certain outcomes.

This is not an argument for expecting explicit outcomes as a rule to lean toward those that would have merged if communication had been impossible; the focal points are certainly different when speech is allowed, except in some of the artificial cases we have used in our illustrations. But what may be the main principle in tacit bargaining apparently may be at least one of the important principles in the analysis of explicit bargaining. And, since even much so-called "explicit" bargaining includes maneuver, indirect communication, jockeying for position, or speaking to be overheard, or is confused by a multitude of participants and divergent interests, the need for convergent expectations and the role of signals that have the power to co-ordinate expectations may be powerful.

Perhaps many kinds of social stability and the formation of interest groups reflect the same dependence on such co-ordinators as the terrain and the circumstances can provide: the band wagon at political conventions, that often converts the slightest sign of plurality into an overwhelming majority; the power of constitutional legitimacy to command popular support in times of anarchy or political vacuum; the legendary power of an old gang leader to bring order into the underworld, simply because obedience depends on the expectation that others will be obedient in punishing disobedience. The often expressed idea of a "rallying point" in social action seems to reflect the

same concept. In economics the phenomena of price leadership, various kinds of non-price competition, and perhaps even price stability itself appear amenable to an analysis that stresses the importance of tacit communication and its dependence on qualitatively identifiable and fairly unambiguous signals that can be read in the situation itself. "Spontaneous" revolt may reflect similar principles: when leaders can easily be destroyed, people require some signal for their co-ordination, a signal so unmistakably comprehensible and so potent in its suggestion for action that everyone can be sure that everyone else reads the same signal with enough confidence to act on it, thus providing one another with the immunity that goes with action in large numbers. (There is even the possibility that such a signal might be provided from outside, even by an agent whose only claim to leadership was its capacity to signal the instructions required for concerted action.)

## Tacit Negotiation and Limited War

What useful insight does this line of analysis provide into the practical problems of tacit bargaining that usually confront us, particularly the problems of strategic maneuver and limited war? It certainly suggests that it is possible to find limits to war—real war, jurisdictional war, or whatever—without overt negotiation. But it gives us no new strong sense of probability. War was limited in Korea, and gas was not used in World War II; on the possibility of limited war these two facets are more persuasive than all the suggestions contained in the foregoing discussion. If the analysis provides anything, then, it is not a judgment of the probability of successfully reaching tacit agreement but a better understanding of where to look for the terms of agreement.

If there are important conclusions to be drawn, they are probably these: (1) tacit

33

agreements or agreements arrived at through
partial or haphazard negotiation require
terms that are qualitatively distinguishable
from the alternatives and cannot simply be
a matter of degree; (2) when agreement
must be reached with incomplete commu-
nication, the participants must be ready to
allow the situation itself to exercise substan-
tial constraint over the outcome; specifi-
cally, a solution that discriminates against
one party or the other or even involves
"unnecessary" nuisance to both of them may
be the only one on which their expectations
can be co-ordinated.

Gas was not used in World War II. The
agreement, though not without antecedents,
was largely a tacit one. It is interesting to
speculate on whether any alternative agree-
ment concerning poison gas could have been
arrived at without formal communication
(or even, for that matter, with communica-
tion). "Some gas" raises complicated ques-
tions of how much, where, under what cir-
cumstances: "no gas" is simple and unam-
biguous. Gas only on military personnel;
gas used only by defending forces; gas only
when carried by vehicle or projectile; no
gas without warning—a variety of limits is
conceivable; some may make sense, and
many might have been more impartial to
the outcome of the war. But there is a sim-
plicity to "no gas" that makes it almost
uniquely a focus for agreement when each
side can only conjecture at what rules the
other side would propose and when failure
at co-ordination on the first try may spoil
the chances for acquiescence in any limits
at all.

The physical configuration of Korea must
have helped in defining the limits to war
and in making geographical limits possible.
The area was surrounded by water, and the
principal northern political boundary was
marked dramatically and unmistakably by
a river. The thirty-eighth parallel seems to

have been a powerful focus for a stalemate;
and the main alternative, the "waist," was a
strong candidate not just because it pro-
vided a shorter defense line but because it
would have been clear to both sides that an
advance to the waist did not necessarily sig-
nal a determination to advance farther and
that a retreat to the waist did not telegraph
any intention to retreat farther.

The Formosan Straits made it possible to
stabilize a line between the Communist and
National government forces of China, not
solely because water favored the defender
and inhibited attack, but because an island
is an integral unit and water is a conspic-
uous boundary. The sacrifice of any part of
the island would have made the resulting
line unstable; the retention of any part of
the mainland would have been similarly un-
stable. Except at the water's edge, all move-
ment is a matter of degree; an attack across
water is a declaration that the "agreement"
has been terminated.

In Korea, weapons were limited by the
qualitative distinction between atomic and
all other; it would surely have been much
more difficult to stabilize a tacit acceptance
of any limit on size of atomic weapons or
selection of targets. No definition of size or
target is so obvious and natural that it goes
without saying, except for "no size, on any
target." American assistance to the French
forces in Indochina was persuasively limited
to material, not people; and it was appre-
ciated that an enlargement to include, say,
air participation could be recognized as lim-
ited to air, while it would not be possible
to establish a limited *amount* of air or
ground participation. One's intentions to ab-
stain from ground intervention can be con-
veyed by the complete withholding of
ground forces; one cannot nearly so easily
commit *some* forces and communicate a
persuasive limit to the *amount* that one in-
tends to commit.

34

THOMAS C. SCHELLING

The strategy of retaliation is affected by the need to communicate or co-ordinate on limits. Local aggression defines a place; with luck and natural boundaries, there may be tacit acceptance of geographical limits or types of targets. One side or both may be willing to accept limited defeat rather than take the initiative in breaching the rules and to act in a manner that reassures the other of such willingness. The "rules" may be respected because, if they are once broken, there is no assurance that any new ones can be found and jointly recognized in time to check the widening of the conflict. But if retaliation is left to the method and place of the retaliator's own choosing, it may be much more difficult to convey to the victim what the proposed limits are, so that he has a chance to accept them in his counter-retaliation. In fact, the initial departure of retaliation from the locality that provokes it may be a kind of declaration of independence that is not conducive to the creation of stable mutual expectations. Thus the problem of finding mutually recognized limits on war is doubly difficult if the definition implicit in the aggressor's own act is not tolerable.

In sum, the problem of limiting warfare involves not a continuous range of possibilities from most favorable to least favorable for either side; it is a lumpy, discrete world that is better able to recognize qualitative than quantitative differences, that is embarrassed by the multiplicity of choices, and that forces both sides to accept some dictation from the elements themselves. The writer suggests that the same is true of restrained competition in every field in which it occurs.

## Prior Arrangements

While the main burden of this paper has been that tacit bargaining is possible and is susceptible of systematic analysis, there is

no assurance that it will succeed in any particular case or that, when it succeeds, it will yield to either party a particularly favorable outcome compared with alternatives that might have been available if full communication had been allowed. There is no assurance that the next war, if it comes, will find mutually observed limits in time and of a sort to afford protection, unless explicit negotiation can take place. There is reason, therefore, to consider what steps can be taken before the time for tacit bargaining occurs, to enhance the likelihood of a successful outcome.

Keeping communication channels open seems to be one obvious point. (At a minimum, this might mean assuring that a surrender offer could be heard and responded to by either side.) The technical side of this principle would be identification of who would send and receive messages, upon what authority, over what facilities, using what intermediaries if intermediaries were used, and who stood in line to do the job in what fashion if the indicated parties and facilities were destroyed. In the event of an effort to fight a restrained nuclear war, there may be only a brief and busy instant in which each side must decide whether limited war is in full swing or full war has just begun; and twelve hours' confusion over how to make contact might spoil some of the chances for stabilizing the action within limits.

Thought should be given to the possible usefulness of mediators or referees. To settle on influential mediators usually requires some prior understanding, or at least a precedent or a tradition or a sign of welcome. Even if we rule out overt arrangements for the contingency, evidences by each side of an appreciation of the role of referees and mediators, even a little practice in their use, might help to prepare an instrument of the most extreme value in an awful contingency.

35

But all such efforts may suffer from the unwillingness of an adversary to engage in any preparatory steps. Not only may an adversary balk at giving signs of eagerness to come to agreement; it is even possible that one side in a potential war may have a tactical interest in keeping that war unrestrained and aggravating the likelihood of mutual destruction in case it comes. Why? Because of the strategy of threats, bluffs, and deterrents. The willingness to start a war or take steps that may lead to war, whether aggression or retaliation to aggression, may depend on the confidence with which a nation's leaders think a war could be kept within limits. To be specific, the willingness of America to retaliate against local aggression with atomic attack depends -and the Russians know that it depends- on how likely we consider it that such retaliation could itself remain limited. That is, it depends on how likely it is in our judgment that we and the Russians, when we both desperately need to recognize limits within which either of us is willing to lose the war without enlarging those limits, will find such limits and come to mutually recognized acquiescence in them. If, then, Russian refusal to engage in any activity that might lead to the possibility of limited war deters our own resolution to act, they might risk forgoing such limits for the sake of reducing the threat of American action. One parachutist in our example may know that the other will be careless with the plane if he is sure they can meet and save themselves; so if the first abstains from discussing the contingency, the other will have to ride quietly for fear of precipitating a fatal separation in the terrain below.

Whether this consideration or just the usual inhibitions on serious negotiation make prior discussion impossible, there is still a useful idea that emerges from one of our earlier games. It is that negotiation or com-

munication for the purpose of co-ordinating expectations need not be reciprocal: unilateral negotiation may provide the co-ordination that will save both parties. Furthermore, even an unwilling member cannot necessarily make himself unavailable for the receipt of messages. Recall the man who proposed the letter R in one of the bargaining games: as long as the partner heard-and it is obvious that he heard-the letter R is the only extant proposal, and, being unchallenged, it may co-ordinate in default of any counterproposal nearly as well as if it had been explicitly accepted. (Even *denial* of it by the other party might not manage to dislodge its claim to prominence but rather simply prove his awareness of it, as long as no rival claim was made that created ambiguousness.) If one of our parachutists, just before the plane failed and while neither of them dreamed of having to jump, idly said, "If I ever had to meet somebody down there, I'd just head for the highest hill in sight," the other would probably recall and know that the first would be sure he recalled and would go there, even though it had been on the tip of his tongue to say, "How stupid," or "Not me, climbing hurts my legs," when the plane failed. When some signal is desperately needed by *both* parties and both parties know it, even a poor signal and a discriminatory one may command recognition, in default of any other. Once the contingency is upon them, their interests, which originally diverged in the play of threats and deterrents, substantially coincide in the desperate need for a focus of agreement.

Two years ago the *Manchester Guardian* suggested that the Western powers consider declaring unilaterally that, in the event of major atomic war, they would not use nuclear weapons against large cities unless the enemy did so first (1, 2). It proposed making a distinction between the massive bomb-

36

THOMAS C. SCHELLING

ing of cities and the more restricted use of
atomic weapons on a battlefield or on strict-
ly military targets such as airfields. The no-
tion was not that the Soviets would agree
overtly or even bother to disagree but that,
if war came, both we and they would be so
eager to find some limits to the bombing of
civilian cities that we both might possibly
manage to observe limits—even quite crude
limits or discriminatory ones—if there were
a proposal in existence as a focus for agree-
ment. Each might at least honor the pro-
posal tentatively, to see whether the other
would too; and the result might be a stable
mutual acquiescence. This proposal illus-
trates negotiation with incomplete commu-
nication or, to put it differently, tacit nego-
tiation with the help of a prior suggestion.
A number of difficulties come to mind:
What is a civilian city? What is a military
target? What kinds of weapons are ruled
out on the former? What margin for error
is to be allowed? etc. Could the Western
powers possibly find definitions and criteria
acceptable enough to the Russians to per-
mit such tacit agreement?

Our analysis of tacit bargaining contains
two suggestions on this problem. One is to
adopt criteria that are as qualitative and
discrete as possible, avoiding reliance on
matters of degree or judgment. The other is
simply that unilateral suggestions, even if
not tested for "acceptability" to the Russians
in any sense analogous to explicit agree-
ment, may serve the desperate purpose
when there is no alternative but mutual de-
struction. In fact, the analogous feature of
explicit negotiation suggests that negotiated
agreement might be more quickly achieved
if there were some prior suggestion around
which mutual expectations could crystallize
when quick agreement was required.⁹

REFERENCES

1. *Manchester Guardian Weekly*, LXXII, No. 19 (May 12, 1955), 1.

2. *Ibid.*, Vol. LXXIII, No. 2 (July 14, 1955).

3. SCHELLING, T. C. "An Essay on Bargaining," *American Economic Review*, Vol. XLVI, No. 3 (1956).

⁹ The questionnaire experiments referred to in this paper will be discussed more fully in a later article in this *Journal*.

RAND

28 April 1959

Professor Robert R. Bowie, Director
Center for International Affairs
Harvard University
Cambridge 38, Massachusetts

Dear Bob:

I promised to send you a statement of research plans to help you in making a submission to a foundation. Several things have kept me from getting around to it, to avoid further delay, I shall outline in loose language the types of research that I have in mind either doing or helping to get done when I settle down with you next year. I have in mind five areas of study -- unless it grows to six before I finish the letter -- and I shall try to indicate in each case what kind of activity and participation might be involved. Please keep in mind that I write this without a good idea of what Henry Kissinger has already organized or is doing himself.

1. Continue my own work on conflict theory, bargaining theory, game theory, or whatever else it should be called. With two possible important exceptions I would do this myself and would need no help. This will be a continuation of the theoretical work I have already done. I expect that as time passes it may become more and more oriented toward international strategy, but it ought to go under the heading of "pure research." The things I have already done will probably have been gathered together into a book before I join you; RAND has sent a prospectus to various publishers and there seems to be some strong interest. The book does not mean that I have wound up my interest.

The two possible exceptions to doing this alone in my armchair are the possibility of some experimental work with games, and the possibility of inducing people in other fields, like Law and Sociology, to do some parallel work. Money for the former could be requested whenever the plans are more concrete. Money for the latter would in the first instance be needed only for organizing a very small conference or bringing one or two people in as consultants for a week or two. If we found somebody who wanted to do such parallel work we might consider bringing him into the Center;

Professor Robert R. Bowie

-3-

28 April 1959

4. **Study of strategic war.** What I have in mind is non-local war, war that is not "limited war," in the usual sense. Because of its comparative attractiveness as a policy, limited war has received a great deal of analytical attention in the last few years. This attention has been largely confined to geographically limited wars. Direct warfare between the central powers seems to have been dismissed from study in the belief that there is nothing to it but mutual suicide in a simple and absolute sense. The possibility that it might not be as simple as mutual suicide has recently generated some interest in the surprise attack problem; Albert Wohlstetter's recent article, for example, is in striking contrast to most of the literature of the last several years. There is some attention being given to less-than-massive reprisal, and what it might lead to. Satellites have raised the abstract question of whether there might be "clean" wars between isolated strategic forces, possibly on a quite limited scale, not involving civilians. Surprise-attack discussions, in reminding us that a Russian first blow would be aimed at our retaliatory forces in the first instance, rather than at our people, raise the possibility of strategic warfare between great powers in which at least one side may be powerfully motivated to minimize the other's civilian casualties, in order to keep his hostages alive -- so to speak -- and so to "negotiate," either explicitly or tacitly. This suggests that deterrence does not necessarily end when war breaks out. Because there has been so little attention to these possibilities, there seems to me to be plenty of room for intellectual accomplishment and communication of a sort that is not dependent on classified information. This is a subject that I plan to think about myself, but it also suggests a role that a full-time visitor might fill for a year.

5. **Economics and National Security.** As you know, this is the subject on which I teach a graduate seminar next year. I am particularly interested in the application of economic reasoning to problems of military choice, military resource allocation, etc., in contrast to the impact of defense programs on the "economy." What I have in mind impinges closely on national security organization, since one of the ways of applying economic reasoning to defense is to think about the defense establishment as an economic system, and to judge it according to the allocative decisions that it generates, etc. There has been good work done of this subject, but not much that is very comprehensive. Arthur Smithies' book on the budgetary process of a few years ago and the book which C. J. Hitch and R. N. McKean of RAND have in manuscript are notable exceptions. I should like to attract somebody with both experience in military affairs and economic training to do a book length piece of work in this area; there is plenty of room for it.

This is very rough and poorly organized but I will send it to you as it is to save time.

TCB:rlh

September 11, 1959

To: Mr. Bowie

From: Mr. Schelling

Subject: Defense Seminar at the Center

This is just to record, very briefly, the ideas we discussed yesterday on how to conduct the defense seminar.

The idea rests on two general points. First, it is essential to have an orderly, logically constructed, detailed, analytical outline of the subject, the subject being "deterrence, etc." broadly defined. Second, it is hard to get good speakers, particularly people whose availability may depend on opportunity, and who can be expected to confine themselves to a particular segment of somebody else's outline, no matter how good the outline is, and furthermore we may get a more inspired discussion from our invited speakers if we encourage them to talk on the things that ~~generally~~ interest them most or the things that they currently feel themselves best prepared to talk about and lead a discussion on.

Instead, therefore, of having an outline that would in effect be "filled in" by the various discussion leaders, and that would therefore take a logical state only to the extent that the discussion leaders could be made to fit themselves into the outline, it may be a better idea to think of the outline as a process or exercise to be managed by ourselves mainly for our own benefit, and to leave the speakers more free.

According to this procedure, we would set it as a goal of the seminar to develop, within perhaps 4-6 weeks, a thorough-going outline of subjects, one that we were all familiar with, and that would serve as a definition of the scope of the subject and guide to its contents. The activity might be something as follows. In the first meeting we could range rather widely over the subject, just trying to explore what the different directions were in which we had to go, and developing a tentative list or outline of topics together with some idea of their relation to each other. Depending on how far we get at the first meeting, this discussion might be continued for a second meeting. We might then agree to comb through a fairly general

Mr. Bowie

2.

September 11, 1959

reading list, still by way of exploration, to collect a really
extensive list of ideas, issues, concepts, propositions and areas
of research, that ought to be fit into a comprehensive outline.
This would probably take the form of written lists prepared by
the members of the Seminar, lists or outlines, depending on how
well the different points seem to fall into a logical pattern.
These individual submissions might then be collated by, say, a
two-man subcommittee, and distributed to the group. At least
one more session would be required to organize the various points
in a logical and convenient outline. Presumably there would be
enough discussion, substantive but not conclusive, to give
everybody some common notion of what the points mean, why the
outline takes the form it does, where the principal misunderstandings
and disagreements among us are, what points are most attractive
to pursue in detail, etc.

If this procedure is to have a high possibility of
working, somebody will have to impose enough intellectual leadership
on the group to make all the detailed points fall into an organized
pattern; this probably means having in fact an outline pretty well in
mind. This does not contradict the fact that, in matters of this
sort, there is usually no single best outline form for the subject.

At an appropriate stage, which I think we need not try too
hard to identify in advance, we switch from the process of building
up an outline to one of using it to guide substantive argument and
further research. This switch may not be very sudden; in fact the
outline ought to change its shape during the whole course of the year.

The relation of the outline to the invited discussion
leaders might then be this. First, we use the outline as a
device for sorting out, among ourselves, what we get from the
invited speakers; even if they cannot locate themselves in the
outline, we should be able to. Second, we should mail a fairly
advanced version of the outline to the speakers in advance, to let them
see what our conception of the overall subject is, how we break it
down, what we think is relevant and how we think the parts relate
to each other, suggesting to the speaker that it would be helpful
if, during the discussion, he identifies as much as he can with
his own talk in terms of our outline. Quite possibly the outline
would be in front of us during the discussion period as a kind of
"silent chairman" to keep us from losing track of where we are, to
help us sort out various points, make necessary distinctions and
connections, etc. And if a speaker thinks that our outline embodies
a misconception of the problem, he is free to go after it if he
wishes, and show us how he would divide up the subject and relate
the parts.

As to the general subject and the outline itself, I think
the brief outline you handed me is pretty suggestive of the whole
subject and, though we might end up with something totally different,
it may nevertheless serve as a starting point for our own planning.

MEMORANDUM

To: Henry Kissinger

From: T. Schelling

Dear Henry:

Just a note to raise a question with you that is somewhat urgent, in case I don't see you as soon as you are back. I would like to suggest that you let go of Morton Halperin so that we can use him for something else. As you know, we and MIT have a drawing account for $5,000 at the Ford Foundation for various promotional and other activities in the field of arms control, and it has been specifically suggested that we and the MIT Center take on a half-time executive secretary to manage such affairs as we can invent for the organization that we invent. Halperin is spending full time this summer with our arms control Study Group. His thesis bears on the subject. The idea was that somebody at about his age and status be taken on in the executive secretary position. I have made one try at a man, without success. I think Halperin would be ideal.

It would also give us an excuse to pay him more. We could take him on at something like $4,800 as a research associate, half of whose time was for his own research and half supposedly as executive secretary for arms control activities. He could then give back to Yale the $2,000 that they gave him on condition that he earn no more than a ¼-time salary. I think he is extremely good. For that reason I hate to suggest you release him, but also for that reason I would like to get him back--for us, not just for me. I haven't mentioned this to him, and won't until you clear it.

January 9, 1960

Mr. Thomas Phipps
U.S. Naval Ordnance Test Station
China Lake
California

Dear Tom:

Could you recommend any Naval officers at the rank of
Captain, who you think could profit from, and contribute
to, our Center for International Affairs? We bring each
year twelve people from the government, six Americans
and six foreign, three of the Americans from the three
Services. They attend seminars, read, write, papers, and
so forth, not working for a degree but just in the
interest of their own development. The Services select
good people for us, but we would particularly like to
get people who have the special intellectual qualities
and interests that would profit from a year at Harvard.
We can have some influence on the selection of people,
if we are in a position to suggest names of officers
whom we would be especially delighted to receive. If
you or your colleagues know of some officers you are es-
pecially enthusiastic about, it would be a great help to
us if you would informally pass along their names to us.
As far as I know, the Navy would have no objections to
such procedure; they are as interested as we are in fit-
ting the right officers into this specialized experience.

TCS:ac

January 9, 1960

Mr. Thomas Milburn
U.S. Naval Ordnance Test Station
China Lake
California

Dear Tom:

Could you recommend any Naval officers at the rank of
Captain, who you think could profit from, and contribute
to, our Center for International Affairs? We bring each
year twelve people from the government, six Americans
and six foreign, three of the Americans from the three
Services. They attend seminars, read, write papers, and
so forth, not working for a degree but just in the
interest of their own development. The Services select
good people for us, but we would particularly like to
get people who have the special intellectual qualities
and interests that would profit from a year at Harvard.
We can have some influence on the selection of people,
if we are in a position to suggest names of officers
whom we would be especially delighted to receive. If
you or your colleagues know of some officers you are es-
pecially enthusiastic about, it would be a great help to
us if you would informally pass along their names to us.
As far as I know, the Navy would have no objections to
such procedure; they are as interested as we are in fit-
ting the right officers into this specialized experience.

TCS:ac

January 9, 1960

Dr. Jacinto Steinhardt
Operations Evaluation Group
Massachusetts Institute of Technology
292 Main Street
Cambridge, Mass.

Dear Dr. Steinhardt:

Could you recommend any Naval officers at the rank of
Captain, who you think could profit from, and contribute
to, our Center for International Affairs? We bring each
year twelve people from the government, six Americans
and six foreign, three of the Americans from the three
Services. They attend seminars, read, write papers, and
so forth, not working for a degree but just in the interest
of their own development. The Services select good people
for us, but we would particularly like to get people who
have the special intellectual qualities and interests that
would profit from a year at Harvard. We can have some
influence on the selection of people, if we are in a
position to suggest names of officers whom we would be
especially delighted to receive. If you or your colleagues
know of some officers you are especially enthusiastic
about, it would be a great help to us if you would in-
formally pass along their names to us. As far as I know,
the Navy would have no objections to such procedure;
they are as interested as we are in fitting the right
officers into this specialized experience.

TCS:ac

TCB:ac

Thomas C. Scheffing

Very sincerely yours,

officers into this specialised experience.
they are so interested as we are in fitting the right
the Navy would have no objections to such procedure;
formally pass along their names to us. As far as I know,
apout, it would be a great help to us if you would in-
know of some officers you are especially enthusiastic
especially delighted to receive. If you or your colleagues
position to suggest names of officers whom we would be
influence on the selection of people, if we are in a
would benefit from a year at Harvard. We can have some
have the special intellectual qualities and interests that
for us, but we would particularly like to get people who
of their own development. The Services select good people
so forth, not working for a degree but just in the interest
Services. They attend seminars, read write papers, and
and ask foreign, three of the Americas from the three
year twelve people from the government, six Americas
to, our Center for International Affairs? We bring each
Captain, who you think could benefit from, and contribute
Could you recommend any Naval officers at the rank of

Dear Dr. Steinhardt:

Cambridge, Mass.

585 Main Street

Operations Evaluation Group

Dr. Tscinto Steinhardt

January 9, 1960

7 April 1960

MEMORANDUM

To: Bowie, Kissinger

From: Schelling

Subject: Military Seminar for Next Year

These are a few thoughts on how we might handle the seminar
next year so that it works out better than it did this year. I think we
may have made three mistakes this year. First, I think we overrated the
background and sophistication that both the military and the civilian
participants would bring, and relied on them too much to carry along the
discussion themselves, through reports on their reading, and so forth.
Stronger direction from us, and especially more substantive material pre-
sented to them by us for discussion--not quite in the form of lectures, but
in the form of talks that might occupy the first hour of a meeting--for the
first six or eight weeks might be an improvement. (I say this conscious of
the fact that it is the opposite of what I argued for at the beginning of the
year.)

Second, I think we forced the military people too early in the
year into a sense of commitment, or responsibility, or representation, with
respect to their own military services. I think we should lean over back-
wards to avoid identifying them with their own services, or even with the
military profession, at the beginning of the year; I especially think we
should avoid putting them in the position of taking positions/fore they have

2.

had several weeks to warm up for the seminar, to get used to the level of
discussion we would like, and develop some intimacy and confidence in the
rest of the group.

Third, it might be better to play down the importance of
choosing a topic for a paper early in the year, insisting that a topic
should grow out of discussion and should be their main occupation during
the period from about Christmas to Easter, or at least in the middle of the
year. I say this because I think at least two of the military papers this
year were started too early on "safe" topics, unrelated to the seminar itself,
and got the authors very conscious of the need to catalog their positions
on all matters of interest to their particular services. I think we might
generally try to promote an informal expectation that papers would not be
closely related to the professional interests of the people concerned,
partly to avoid the informal or subconscious "censorship" that anybody may
feel, but especially a military officer, in writing a paper that is directly
concerned with the concrete policies of his own service.

I suggest that we plan to use Kissinger, Schelling, Rowen, and
Snyder if he is here, as discussion leaders for maybe the first seven or
eight weeks of the term. We can give people stuff to read, including our
own stuff. It might be especially good to give them not "canned" analyses
in a teaching sense, but rather to give them talks about the things we are
currently working on. If, say, Harry Rowen were to spend a couple of weeks
on the subject of arms control, taking the attitude of a person who is
getting deep in the field and not of someone who has mastered it, it may
give the people some sense of participating in the Center's work in progress,
and give them some example of how one approaches a subject of that sort,
and in particular conveying to them the notion that at a place like the
Center one is more interested in opening up new ideas, new lines of inquiry.

3.

and exploring the subject, rather than in wrapping up a neat set of conclusions.

Possibly we should devote a substantial part of the year explicitly to arms control, as a case study, and currently the most important policy issue, in which political and military considerations are closely bound up with each other.

I think, too, that it will help to have a somewhat larger number of "professionals" in the group, to dilute somewhat the selfconsciousness of the Fellows of their own status and of the difference between them and us, and so that the professional tone of the seminar can be set without too much "teaching" activity on our part. Rowen will be a great help, Snyder too if he is with us. Halperin, if he is here, would be in the group. And perhaps there are one or two others from Harvard or MIT that we should try to get to attend regularly, at least for the part of the year that we're on subjects that they are professionally interested in. I don't want to make the group too big, but I should think that a few more actively participating professionals than we had this year would be a help.

participating broadeasonale than we had this year would be a help.

want to make the group too big, but I should think that a few more activit

that we're on subjects that they are broadeasonally interested in. I don't

under too if he is with us. Halberin, if he is here, would be in the
too much "fascinating" activity on our part. However will be a great help,

and so that the broadeasonal tone of the seminar can be set without

ness of the help of their own staff and of the difference between them

under of "broadeasonals" in the group, to dilute somewhat the seloconscio-

pound up with each other.

pound up with each other.

bottom line, in which political and military considerations are closely

part of the year

participating broadeasonals.

group.

and exploring the subject, rather than in wrangling up a neat set of con-

3.

ECONOMICS 207

Economics and National Security

Spring 1960

READING ASSIGNMENTS

Note: Reading indented items is optional; but all starred items should be looked at even if not read carefully.

GENERAL BACKGROUND

Washington Center for Foreign Policy Research (Arnold Wolfers, Director).
*Developments in Military Technology and Their Impact on United States Strategy and Foreign Policy*, Committee Print, Committee on Foreign Relations, U.S. Senate, Dec. 6, 1959. Part C, "Technological Developments and the Strategic Equation," Chapters 1-4, pp. 30-85.

National Planning Association, "1970 Without Arms Control", A Special Committee Report, Planning Pamphlet 104, May 1958.

Davidon, William C., Kalkstein, Marvin I., Hohenemser, Christoph. "Prerequisites for Nuclear Weapons Manufacture", in National Planning Association, *The Nth Country Problem and Arms Control*, Planning Pamphlet No. 108, Jan. 1960, pp. 11-28.

Glasstone, Samuel (ed.). *Effects of Nuclear Weapons*; Dept. of Defense and Atomic Energy Commission, 1957 edition, pp. 18-33, 90-96, 103-111, 196-202, 209-11, 212-15, 237-8, 345-8, 390-429, 446-54, 524-31, 536-43, glossary p. 544 ff.

I. EFFICIENCY IN MILITARY DECISIONS

Hitch, Charles J., McKean, Roland. "Defense as an Economic Problem", "Efficiency in Military Decisions", Mimeograph.

Morse, Philip M., Kimball, George E. *Methods of Operations Research*, New York, The Technology Press and John Wiley and Sons, Inc. 1951, pp. 1-10, 38-60, 63-67 (scan 67-77), 77-80.

Hitch, Charles J. "Economics and Military Operations Research," *Review of Economics and Statistics*, XL, 199-209, Aug. 1958.

Schelling, T.C. "Comment", Symposium on Economics and Operations Research, *Review of Economics and Statistics*, XL, 221-224, Aug. 1958.

ECONOMICS 207

2.

Hoag, Malcolm. "Some Complexities in Military Planning," *World Politics*, XI, 553-576, July 59.

Enke, Stephen. "Some Economic Aspects of Fissionable Material," *Quarterly Journal of Economics*, LXVIII, 217-232, May 54.

Bowers, Robert D. (Col). "Fundamental Equations of Force Survival," *Air University Quarterly Review*, X, 82-92, Spring 58.

Karchere, A. Hoeber, F.P. "Combat Problems, Weapons Systems, and the Theory of Allocation," *JORSA*, Nov. 53.

Kahn, H. Mann, I. "Techniques of Systems Analysis," The RAND Corporation, RM-1829-1, 3 Dec. 58 revised June 57, Chapters 1, 2, 3, pp. 1-113.

Enke, Stephen. "An Economist Looks at Air Force Logistics," *Review of Economics and Statistics*, XL, 230-39, Aug. 58.

Fisher, Gene H. "Weapon-System Cost Analysis," *Operations Research*, Oct. 56, pp. 558-571.

Mendershausen, Horst. "Economic Problems in Air Force Logistics," *American Economic Review*, Sept. 58, 632-648.

*Engel, J.H. "A Verification of Lanchester's Law," *JORSA*, May 54, II.

*Brackney, Howard. "The Dynamics of Military Combat," *Operations Research*, VII, 30-44, Jan-Feb. 59.

*Firstman, Sidney I. "A Vulnerability Model for Weapon Sites with Interdependent Elements," *Operations Research*, VII, 217-25, Mar-Apr. 59.

Weiss, Herbert K. "Lanchester-Type Models of Warfare," *Proceedings of the First International Conference on Operations Research*, ORSA, Baltimore, 1957, pp. 82-99.

## II. COPING WITH AN INTELLIGENT ADVERSARY

Kahn, Herman, Mann, Irwin. "Techniques of Systems Analysis," Chapter 4, "The Two-Sided War," pp. 114-131; Chapter 5, "Evaluation and Criticism," pp. 132-161.

Schelling, T.C. "Assumptions About Enemy Behavior," Lecture 12 in *An Appreciation of Systems Analysis*. The RAND Corporation, B-90, 1959. (Mimeograph).

Williams, John D. *The Compleat Strategist*, New York, McGraw-Hill Book Co. Inc., 1954. Chapters 1 and 2, pp. 1-85. Rest of book optional; suggest scan several of the problems in remaining chapters.

ECONOMICS 207

3.

Alchian, Armen A. "The Meaning of Utility Measurement," *American Economic Review*, XLIII, 26-50, Mar. 53.

Luce, R. Duncan, Raiffa, Howard. *Games and Decisions* (New York, 1957). Chapter 2, pp. 2-17, 19-38; Chapter 4, pp. 56-76, 85-87.

Morse, Philip M., Kimball, George E. *Methods of Operations Research*, "Measure and Countermeasure," pp. 94-102; "Theoretical Analysis of Countermeasure Action," pp. 102-109.

Haywood, O.G. "Military Decision and Game Theory," *JORSA*, Nov. 54.

*Hale, J.K., Wicke, H.H. "An Application of Game Theory to Special Weapons Evaluation," *Naval Research Logistics Quarterly*, IV, 347-56.

*Dobbie, James M. "On the Allocation of Effort Among Deterrent Systems," *Operations Research*, VII, 335-46, May-June 59.

Isbell, J.R., Marlow, W.H. "Attrition Games," *Naval Research Logistics Quarterly*, III, 71-94.

*Blackett, D. W. "Some Blotto Games," *Naval Research Logistics Quarterly*, I, 55-60, Mar. 54.

Thompson, S.P., Ziffer, A. J. "The Watchdog and the Burglar," *Naval Research Logistics Quarterly*, VI, 165-72, June 59.

Caywood, T.E., Thomas, C.J. "Application of Game Theory in Fighter vs. Bomber Combat," *JORSA*, III, Nov. 55.

*Antosiewicz, H.A. "Analytic Study of War Games," *NRLQ*, II, 181-208, Sept. 55.

Isaacs, Rufus. "The Problem of Aiming and Evasion," *NRLQ*, II, 47-68, May-June 55.

Zachrisson, L.E. "A Tank Duel with Game-Theoretic Implications," *NRLQ*, IV, 131-38, June 57.

### III. EXPERIMENT AND SIMULATION

Specht, Robert D. "War Games," The RAND Corporation, P-1041, March 18, 1957.

Thomas, Clayton J., Deemer, Walter L. "The Role of Operational Gaming in Operations Research," *Operations Research*, Feb. 57, 1-27.

ECONOMICS 207

4.

Rauner, R.M. *Laboratory Evaluation of Supply and Procurement Policies*. The RAND Corporation, Report R-323, July 1958.

Thomas, Clayton L. "The Genesis and Practice of Operational Gaming," *Proceedings of the First International Conference on Operations Research*; Operations Research Society of America, Baltimore, 1957.
Max Davies, et al, eds. pp. 64-81.

Young, John P. "A Survey of Historical Developments in War Games," *Operations Research Office, The Johns Hopkins University, Staff Paper ORO-SP-98*, March, 1959. (Mimeo, 108 pages plus bibliography.)

## IV. THE STRATEGY OF POTENTIAL FORCE

Schelling, T.C. "The Retarded Science of International Strategy." *Bulletin of the Atomic Scientists*, March 60.

Brodie, Bernard. *Strategy in the Missile Age*, Princeton, 1959. Ch. 1, "Introduction," 3-20; Ch. 6, "Is There a Defense," 173-222; Ch. 8, "The Anatomy of Deterrence," 264-304; Ch. 9, "Limited War," 305-357.

Wohlstetter, Albert. "The Delicate Balance of Terror." *Foreign Affairs*, Jan. 59, pp. 211-234.

Sherwin, C. W. "Securing Peace through Military Technology." *Bulletin of the Atomic Scientists*, XII, 159-165, May 56.

Schelling, T.C. "Bargaining, Communication, and Limited War." *Journal of Conflict Resolution*, I, 19-36, Mar. 57.

Schelling, T.C. "The Strategy of Conflict: Prospectus for a Reorientation of Game Theory." *Journal of Conflict Resolution*, II, 203-264, Sept. 58.

Rapoport, Anatol. "Lewis F. Richardson's Mathematical Theory of War," *Journal of Conflict Resolution*, I, 249-99, Sept. 57; Part IV, "The Mathematics of Arms Races," pp. 275-82.

Washington Center for Foreign Policy Research (Arnold Wolfers, Director), "Developments ..." Part C. Chapters 5, 6; pp. 85-97.

Schelling, T. C. "Surprise Attack and Disarmament." *Bulletin of the Atomic Scientists*, XV, 413-18, Dec. 59.

Luce, R. Duncan, Raiffa, Howard. *Games and Decisions*, New York, 1957. Chapters 5, 6, pp. 88-154.

ECONOMICS 207

5.

Washington Center for Foreign Policy Research (Arnold Wolfers, Director), "Developments ..." etc. Part D, "The Development of Deterrent and Counterdeterrent Strategies," pp. 98-104. Part E, "The Crisis of Strategic Nuclear Deterrence," pp. 105-118.

Schelling, T.C. "Randomization of Threats and Promises," The RAND Corporation, P-1716, June 5, 1959.

Schelling, T. C. "The Threat That Leaves Something to Chance," Mimeograph, Center for International Affairs, Harvard University (no date).

Schelling, T.C. "The Reciprocal Fear of Surprise Attack." The RAND Corporation, P-1342, revised May 58.

Rathjens, George. Ch. 4, in Klaus Knorr (ed.), *NATO and American Security*, Princeton 1959. "NATO Strategy: Total War," pp. 65-97.

Hoag, Malcolm. "The Place of Limited War in NATO Strategy," Ch. 5 of Klaus Knorr (ed.), *NATO and American Security*, Princeton 1959, pp. 98-126.

Szilard, Leo. "Disarmament and the Problem of Peace," *Bulletin of the Atomic Scientists*, Vol. II, Oct. 55.

Kaplan, Morton. "Some Problems in the Strategic Analysis of International Politics," Research Monograph No. 2, Center of International Studies, Princeton, Jan. 1959.

Kaplan, Morton A. "The Strategy of Limited Retaliation," Policy Memorandum No. 19, Center of International Studies, Princeton, April 1959.

Kaplan, Morton A. "The Calculus of Nuclear Deterrence," *World Politics*, XI, 20-43, Oct. 58.

Burns, Arthur Lee. "From Balance to Deterrence: A Theoretical Analysis," *World Politics*, IX, 494-529, July 57.

Burns, Arthur Lee. "The Rationale of Catalytic War," Research Monograph No. 3, Princeton Center of International Studies, Apr. 2, 59.

Rapoport, Anatol. "Lewis F. Richardson's Mathematical Theory of War," *Journal of Conflict Resolution*, I, 249-299, Sept. 57.

V. ECONOMICS OF DISASTER

Hirshleifer, Jack. "Some Thoughts on the Social Structure After a Bombing Disaster," *World Politics*, VIII, 206-227, Jan. 56.

ECONOMICS 207

6.

Tiryakian, Edward A. "Aftermath of a Thermonuclear Attack on the United States," *Social Problems*, VI, 291-303, Spring 1959.

Enke, Stephen. "Controlling Consumers in Future Wars," *Quarterly Journal of Economics*, LXXII, 558-573, Nov. 58.

Bear, Donald V. T., Clark, Paul G. "Which Industries Would Be Most Important in a Postwar U.S. Economy?" (Mimeograph).

Hirshleifer, J. "War Damage Insurance," *Review of Economics and Statistics*, May 53.

## VI. EXTREMES AND INTANGIBLES IN SOCIAL CHOICE

Hitch, Charles J., McKean, Roland N. "Incommensurables, Uncertainty, and the Enemy," (Mimeograph, 39 pages).

Kahn, Herman. "How Many Can Be Saved?" *Bulletin of the Atomic Scientists*, XV, 30-34, Jan. 59.

Joint Committee on Atomic Energy, "Biological and Environmental Effects of Nuclear War," Summary Analysis of Hearings, June 22-26, 1959.

Committee on Government Operations, "Atomic Shelter Programs," Thirty-fourth report of the committee, Aug. 12, 1958.

Deer, James W. "Whatever Happened to Civil Defense," *Bulletin of the Atomic Scientists*, XV, 266-7 June 59.

Lapp, Ralph. "Local Fallout Radioactivity," "Fallout and Home Defense," *Bulletin of the Atomic Scientists*, XV, 181-86, 187-91, May 59.

Morgenstern, Oskar. *The Question of National Defense*, New York 1959, Ch. 5, "Attrition, Shelters and Recovery," 104-133.

Schubert, Jack, Lapp, Ralph. *Radiation: What It Is and How It Affects You*, New York, 1957. Ch. 3, 4, 11, 12.

*Bulletin of the Atomic Scientists*, *Radiation and Man*, Special Issue, XIV, 1-64, Jan. 58.

The RAND Corporation, Report on a Study of Non-Military Defense, Report R-322-RC, July 1, 1958. 48 pages.

Ramsey, F. A., Jr. "Damage Assessment Systems and their Relation-
ship to Post-Nuclear-Attack Damage and Recovery," *Naval Research
Logistics Quarterly*, V, 199-219, Sept. 58.

ECONOMICS 207

7.

VII. DESIGN OF EFFICIENT MILITARY INSTITUTIONS

Smithies, Arthur. *The Budgetary Process in the United States*, New York 1955.
Ch. 12: The Defense Budget: Economy and Efficiency in the Defense Program,
pp. 278-325.

Lindblom, C. E. "Decision Making in Taxation and Expenditure," *Mimeograph, National Bureau of Economic Research: Conference on Public Finance, April 1959*.

Enthoven, Alain, Rowen, Henry. "Defense Planning and Organization," The RAND Corporation, Paper P-1640, March 17, 59, revised July 28, 59.

Knorr, Klaus. *The War Potential of Nations*, Princeton, 1956. Ch. 1: "War Potential in the Nuclear Age," pp. 3-15; Ch. 6: "Wartime Administration," pp. 99-118; Ch. 7: "The Allocation of Resources," pp. 119-141.

Schelling, T. C. *International Economics*, Chapter 30, "Economic Warfare and Strategic Trade Controls," pp. 487-511.

Livingston, J. Sterling. "Decision-Making in Weapons Development,"
Harvard Business Review, Jan.-Feb. 58.

Klein, Burton H. "A Radical Proposal for R and D," *Fortune*, May 58, 112-.

Schelling, T. C. *International Economics*, Ch. 31, "Trade Controls and National Security," 511-532.

Breckner, Norman. "Government Efficiency and the Military 'Buyer-Seller' Device," The RAND Corporation, P-1744, 8 July 1959.

Enthoven, Alain. "Supply and Demand and Military Pay," RAND P-1186, 30 Sept. 1957.

Cordiner, Ralph. "A Modern Concept of Manpower Management and Compensation for Personnel of the Uniformed Service," (The Cordiner Report), Defense Advisory Committee on Professional and Technical Compensation, U.S. Government Printing Office, 1957.

THE STRUGGLE FOR BURMA

1941-1945

(Proposed Research-Writing Project)

1. **Objective:** To produce a definitive, comprehensive, authoritative and (to the extent possible) concise survey and analysis of World War II in Burma. Specific results expected would be the following:

a. A readable, yet scholarly, published book.

b. To fill the present gap in the historical coverage of World War II in Burma by considering the major campaigns from an overall, objective point of view, rather than from the limited perspective of particular individuals, units, or even national contingents.

c. The following points of view would be interpreted and evaluated from the standpoint of impartial military and historical analysis: Burmese, British, Japanese, Indian, American, Chinese.

2. **Procedure:**

a. The project would be operated entirely by the Defense Services Historical Research Institute (DSHRI), subject to understandings to be reached between DSHRI, the Foundation, and T.N. Dupuy for support to be rendered.

b. Research and writing would be a combined effort by qualified individuals selected by DSHRI, and by Dupuy.

c. Dupuy would be the coordinating editor of the project, as well as a collaborator in writing the history. As coordinating editor he would be responsible for all final decisions on research and writing, including decisions on matters to be included and excluded.

d. Some kind of advisory panel should be appointed to include representatives from Rangoon University, Burma Army and (possibly) military attaches of US, UK, India and Japan. The purpose of this advisory panel would be to provide expert professional advice in certain pertinent areas, and to assist in search for needed research sources.

e. Sources to be checked:

(1) Existing published works
(2) Documents in Rangoon, Washington, London, Tokyo, New Delhi, and possibly Taipei and remotely Peking.
(3) Interviews with living participants and observers.

f. Target date for completion of research and outline to be 1 May, 1961. Manuscript to be completed as soon thereafter as possible, with 1 May 1962 as target date.

3. Publication Aspects

a. A formal agreement should be reached as to publication, royalties, copyright, etc. Agreement between DSHRI, Foundation and Dupuy.

b. Suggest the Foundation arrange for publication by an American or English publishing house, these arrangements being subject to approval of DSHRI and Dupuy.

c. Copyright could be in name of publisher, or of DSHRI, Director of DSHRI, or as otherwise decided.

d. Presumably the Foundation would not want to share in royalties. One possible arrangement would be for royalties to be shared equally between DSHRI and Dupuy.

4. Administrative Support

a. Office equipment, supplies, office space, etc., to be provided by DSHRI.

b. Dupuy to be provided with a full-time secretary from project budget.

c. Books and other research materials currently not available in the DSHRI Library will be obtained as needed by DSHRI.

d. Necessary travel within Burma for the project will be provided by Burma Army.

e. DSHRI will take care of all translation requirements and expenses within its resources; other such expenses to be financed within the contingency fund of the budget. (DSHRI can take care of translations from Burmese, Japanese and Chinese from present resources.)

5. Dupuy Contribution to Project

a. To be principal writer and: coordinating editor.

b. To organize the research effort, and to participate in this effort, particularly in investigation of non-Burmese sources.

c. In light of extensive participation of DSHRI staff, it is estimated that approximately one full year of full-time effort will be required of Dupuy, though actual elapsed time for completion of the job may be longer than light of Dupuy's other commitments, and the time necessary to have drafts reviewed by the advisory panel, and by other interested agencies, private individuals and scholars. Thus, though the budget should provide for supporting only one year of effort by Dupuy on the project, the effort is likely to be spread out over a period of as much as two years.

6. Travel

a. Some trips will be necessary to nearby areas of South and Southeast Asia.

b. After preliminary arrangements have been completed by correspondence, an early trip should be taken by Dupuy to investigate sources, and to pick up records, in Washington, London, Tokyo and New Delhi. This trip should include consultation with official historians in these capitals, and interviews with some participants.

c. Probably one trip will be required between USA and Burma during the writing phase, as the manuscript is put in final form for review and publication. Presumably this would be in late 1961 or early 1962.

7. **Budget**

a. Requirements for financing beyond the resources of DSHRI are:

Travel (tentative estimate)

| | |
| :--- | ---: |
| Nearby Asian countries | $3,000 |
| Outside Asia | 3,000 |
| Per diem expenses | 500 |
| | |
| **Secretary** | **2,000** |
| **Contingent fund (translation, etc.)** | **1,000** |
| **Total** | **$9,500** |

b. In addition the Foundation would have to budget for Dupuy's salary for one year.

HARVARD UNIVERSITY

CENTER FOR INTERNATIONAL AFFAIRS

ROBERT R. BOWIE, Director
HENRY A. KISSINGER,
EDWARD S. MASON
THOMAS C. SCHELLING

6 DIVINITY AVENUE
CAMBRIDGE 38
MASSACHUSETTS

September 21, 1960

From: Thomas C. Schelling

To: Messrs. Bowie, Kissinger, Brown, Rowen, Halperin, and Miss Cole

Subject: Major Robert Gard

I have just asked Major Gard, U.S. Army, to join our political-military seminar as a regular participating member. He is here at Harvard for the year, sent by the Army to complete his dissertation as a member of Don Price's program in Science and Public Policy. His dissertation is in the regulations of armaments with special reference to atomic energy. He is a very nice guy whom I met a year ago at West Point where he was at that time teaching in the social sciences department. Most recently he has been in the arms control part of ISA in the office of the Secretary of Defense. It seems to me so obvious, not because he is an Army Major but because of his research interests and studies, he ought to be an active member of our seminar, that I have go ahead with inviting him to attend regularly and actively. I shall introduce him to the group Thursday of next week.

He should receive notices, etc. His address is 5 Riverside Rd., Weston, Mass. His telephone number is TW-4 0998

TCS:ac

January 3, 1961

From: T. C. Schelling

To: R. R. Bowie

Subject: Kenneth Mansfield

I had a phone call from Kenneth Mansfield who, as you probably know, has been with Senator Jackson for a couple of years working on the NSC study, which is now finished. He called me to get my personal advice about some tentative plans he has. He was thinking of doing a short book of his own on the subject of NSC, or national security machinery, or whatever you call it. He wondered whether I had any thoughts about it and would give him an opinion on whether it seemed a worthwhile thing to do. We chatted a while and I asked him where and under what auspices and with what kind of financing he thought he would do it. I had a hunch he was sounding me out about an invitation to come here. I mentioned the possibility that this might be the place to do it and he seemed exceedingly interested.

I plan to see him in Washington next week to talk about his plans further. I lean toward offering him a salary for several months to come here as a Research Associate and do his short book. I want to check with a few people who know him better than I do. I also want to get a better idea from talking with him about whether he really has in mind something that could be done, say, in six months or would take eighteen months, and whether it sounds as though he has some really good ideas.

Do you know him? Have you any impressions of the quality of his work? Would you like to take seriously the possibility of getting him here? He has a wife and no children, and could move here without much trouble. I don't know what his salary has been. If he comes I don't think we should be stingy, and nobody else will be augmenting his salary. If it turns out that he needs less than a year of support,

January 5, 1961

To: Thomas C. Schelling

From: Henry A. Kissinger

Since I knew you would be unhappy
if you didn't see Dudley on January 12th I
have changed the date of his visit to February
7th. Another, less important, reason is that
I will be out of town on the 12th.

I will be out of town on the 13th.

13th. Another, less important, reason is that

if you didn't see Dudley on January 13th I

since I knew you would be unhappy

From: Henry V. Krausinger

To: Thomas C. Schelling

January 3, 1961

U. S. NAVAL ORDNANCE TEST STATION
CHINA LAKE CALIFORNIA

IN REPLY REFER TO:

17/TRP:rcw

20 January 1961

FIND-N-15-2700/4 (12. 58)

D. Thomas C. Schelling

Harvard Center for International Affairs
6 Divinity Avenue
Cambridge, Massachusetts

Dear Dr. Schelling:

Having been out of the Pentagon for the best part of a year, I am not in direct contact with the richest single source of Navy Captains of the kind you are seeking. No doubt it has occurred to you to direct inquiry to Dr. Steinhardt, of OEG.

At the base here (NOTS) there are two candidates who would earn my recommendation, but I fear both are disqualified by other circumstances. Captain W. W. Hollister, the Commander of the base, is an ex-mathematics teacher with a very alert and inquiring mind. However, he is slated for retirement in a few months. I assume this would disqualify him. The other Captain, R. W. Calland, is equally gifted with enthusiasm and interest, but is sufficiently dedicated to his present job as Station Experimental Officer (scheduled to run for another year or two) to make his availability most doubtful.

This exhausts the roster of suitable individuals with whom I have present contact. From past acquaintance I recall one example of that singular anomaly, the intelligent Intelligence officer, Captain James E. Whatton. He made Captain within the past year, and should be in all respects suitable as to intellectual qualifications. In addition he has a broad background of world travel, having served in the Philippines, the Sixth Fleet, and London; and I think also in South America, where he picked up Spanish. Unfortunately, I cannot tell you his present whereabouts, nor the likelihood of his availability. I was last in touch with him about a year ago; at that time he was in Washington. I would give him my unreserved recommendation.

Hoping that these suggestions may be of some use to you, I am

January 23, 1961

From: T. C. Schelling

To: Messrs. Bowie, Kissinger, Brown, Rowan, and Halperin

Kenneth Waltz will not come next year; he badly wanted to, but
could not get leave after being away on leave last year.

Fred Ikle is very much interested in coming, but he will find
it difficult to let us know for sure in less than a month, and
it may be a little longer. He is thinking a little about spending the year in Europe. I told him we would not press him for an answer in less than a month.

Robert Levine of RAND is interested in getting away for a year
to work on policy and policy-making aspects of arms control and
disarmament. At my suggestion he is applying to the Social
Science Research Council for one of their research grants in
this field, and I told him that if he got it we would be happy
to offer him facilities here. I also told him that if he did
not get it we would try to work something out with him but that
I could not promise to do it with our own funds at the present
time. I told him that Fred Ikle was likely to join us, and we
would prefer not to have two RAND people at the same time paid
out of our own funds, but that we might be able to help him find
some other money.

Dan Ellsberg was delighted to hear that we would like him for a
year. He wants to get back to more theoretical work on bargaining,
decision-making, strategy, and so forth, and may possibly elect to
do it away from RAND, in which case he would be very happy to join
us here. This is a lot of potential RAND people, but while that
is a problem I do not think it is an overriding one.

My guess is that Alain Enthoven will be too busy with the Pentagon
to come within the next year or two.

I suggest that when Bowie returns that he compose a letter to
Fred Ikle. We ought to talk a little about financial arrangements
at that time.

TCS:ac

MASSACHUSETTS INSTITUTE OF TECHNOLOGY • DIVISION OF SPONSORED RESEARCH

OPERATIONS EVALUATION GROUP

OFFICE OF THE CHIEF OF NAVAL OPERATIONS (OPO3EG)
NAVY DEPARTMENT
WASHINGTON 25, D. C.

JACINTO STEINHARDT
DIRECTOR

TELEPHONE
REPUBLIC 7-5185

January 24, 1961

Professor Thomas C. Schelling
Harvard University
Center for International Affairs
Six Divinity Avenue
Cambridge 38, Massachusetts

Dear Professor Schelling:

I have carried your letter of January 9th back and forth between Washington and Cambridge twice before answering it.

I have given considerable thought to the question you raise as to Naval officers who could profit from and contribute to the Center for International Affairs. I have known quite a few who would be excellent, but, unfortunately, most of the people that I am well acquainted with are now Flag Officers and, therefore, too senior for your purposes. In recent years the Captains who I have gotten to know well have just been ready for selection. Thus, usually within a year or two after I have worked with them, they have either become Rear Admirals or have retired from the Navy.

The strongest candidate that occurs to me is a professional intelligence officer, Captain Frederick Welden, whose current code designation in the Office of Chief of Naval Operations is Op922Y. I cannot speak too highly of him.

Some of the senior men on our Staff, who are, nevertheless, 5 - 10 years younger than I, may be better able to help you than I. For this reason, I am showing your letter to John Coyle,

ADDRESS ALL TELEGRAMS AND CALLS TO REPUBLIC 7-5185

OPERATIONS EVALUATION GROUP

OFFICE OF THE CHIEF OF NAVAL OPERATIONS (OPOSEG)
NAVY DEPARTMENT
WASHINGTON 25, D. C.

JACINTO STEINHARDT
DIRECTOR

TELEPHONE
REPUBLIC 7-5105

27 February 1961

Dear Professor Schelling:

Dr. Steinhardt suggested, in his reply to your letter of
January 9, that perhaps some of the other senior OEG men might
have additional names to suggest of naval captains who could
profit from and contribute to the Center for International Affairs.

I have talked with John Coyle, Joseph Engel, and others
among the old hands on our staff, and have gleaned from them the
following names. The present assignment of each captain is
indicated beside his name.

CAPT Earl Hydeman      Assistant to Director, Long Range
                       Objectives Group (Op-93C)
CAPT William Lemos     Assistant to the Chairman, JCS
CAPT Marcus Lowe      Air Transport Squadron Seven
                       (VR-7)
CAPT Levering Smith   Special Projects Office, Bureau
                       of Weapons
CAPT Kenneth Tebo      Special Projects Office, Bureau
                       of Weapons
CAPT Renfro Turner    Fleet Air Wing Eleven

These men have all been concerned with national strategic
planning at the working level and have shown exceptional insight
and sensitivity to its broader aspects.

ADDRESS ALL TELEGRAMS AND CALLS TO REPUBLIC 7-5105