Shakespeare saw the world as a stage. To Nobel prize winner Thomas C. Schelling, Ph.D., all the world’s a playing field. Schelling just won the 2005 Nobel Prize in Economics for his insightful application of game theory to real-life challenges, such as Cold War arms negotiations. I spoke with him recently about how game theory—which looks at how to anticipate and influence what others do—might be applied to some of the problems facing security professionals today.
Consider the challenge of getting private companies—such as airlines, chemical companies, and financial institutions—to improve their security. Game theory, says Schelling, would arrive at the conclusion “that in many of these cases, it is not in the interest of the industry to invest its own resources in more security.”
Businesses, like competitors in any game, must focus on staying ahead—not playing it safe. So can anything put security into the game plan?
Schelling examined that question back in the 1970s by focusing on a specific case in hockey. A hockey player named Teddy Green had sustained a disabling injury after a hit to the head. This was before helmets were required, explains Schelling, and “one of his colleagues remarked, ‘I don’t care what anybody says. From now on I’m going to wear a helmet.’ But he didn’t wear a helmet,” Schelling says
Why didn’t the clear risk of serious harm lead any individual hockey player to upgrade his personal security system? Well, explains Schelling, no hockey player can afford to wear a helmet unless all the other hockey players do. “First, you look like a sissy. Second, it slightly impairs your vision and your hearing and your mobility.”
Conversely, he notes, even at that time, baseball players were not allowed to bat the ball unless they wore a helmet. Players went along, because “if it’s a slight disadvantage in batting, it’s the same for all the teams—and nobody can consider you a sissy.”
Eventually that became the case with hockey as well.
Both involved situations “in which collectively they are all better off if they do it, but individually none of them would be motivated to do it,” explains Schelling.
Similarly, in a post-9-11 world, “I think a lot of what we are talking about is trying to get a whole bunch of industries to take some common steps toward security which may be in the collective interest but not in their own interest,” he says. “Game theory may teach you that it’s extraordinarily difficult to do that by mobilizing voluntary action.”
In that case, he says, the solution may be “that ugly word regulation,” which can ensure that all competitors play by the same—safer—rules. Some private sector groups seem to have arrived at the same conclusion. The American Chemistry Council, for example, now says that it supports some chemical plant security standards to ensure a level playing field for everyone in the business.
Playing it safe isn’t just for sissies.