Strategy as Mutually Contingent Choice

Thomas Schelling’s The Strategy of Conflict carries significant behavioral implications which have been overlooked by economic readers. I argue that these implications are central to Schelling’s vision of game theory, that they fit well with recent advances in experimental psychology and behavioral economics, and provide a comprehensive framework that can inform research on strategy. In my view, Schelling develops a non-mathematical approach to strategy which anticipates on Gigerenzer and Selten’s “ecological rationality†program. This approach maps the processes involved in strategic reasoning and highlights their reliance on the particular information structure of interactive social environments. Building on this approach, I model strategy as a heuristic form of reasoning that governs the way in which individuals search for and provide cues in situations of mutually contingent choice. I conclude by examining how the reference to ecological rationality can help clarify Schelling’s contribution to game theory and outline potential avenues of research into strategic reasoning and interaction.