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A Mexican standoff is most precisely a confrontation among three opponents. The tactics for such a confrontation are substantially different than for a duel, where the first to shoot has the advantage. In a confrontation among three mutually hostile participants, the first to shoot is at a tactical disadvantage. If opponent A shoots opponent B, then while so occupied, opponent C can shoot A, thus winning the conflict. Since it is the second opponent to shoot that has the advantage, no one wants to go first.
In popular usage, the Mexican standoff is sometimes used to refer to confrontations with only two opponents when neither side has an advantage by attacking first. Discussions of the Soviet Union – United States nuclear confrontation during the Cold War frequently used the term, specifically in reference to the Cuban Missile Crisis of 1962. The key element that makes such situations Mexican standoffs is the very close equality in power among all involved. The inability for any one party to advance their position safely is a condition common to any standoff; in a Mexican standoff, there is additionally no safe way for any party to withdraw from their position, making the standoff effectively permanent.
In financial circles, the Mexican standoff is typically used to connote a situation where one side wants something, a concession of some sort, and is offering nothing of value. When the other side sees no value in agreeing to any changes, they refuse to negotiate. Although both sides may benefit from the change, neither side can agree to adequate compensation for agreeing to the change, and nothing is accomplished.
This expression came into usage during the last decade of the 19th century; the Cambridge Advanced Learner's Dictionary makes an unattributed claim that the term is of Australian origin. Other sources claim the reference is to the Mexican American War or post-war Mexican bandits in the 19th century.
Some examples used in movies include:
The ending of the video game Call of Juarez: The Cartel features the protagonists engaging in a mexican stand-off. This then leaves the player(s) to decide whether or not to kill their teammates.
In the 2010 video game Red Dead Redemption, almost every multiplayer match begins with a Mexican standoff to determine which player or team gets an early advantage.
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