A Mexican standoff is a confrontation between two or more parties in which none of the parties can either proceed nor retreat without exposing themselves to danger. As a result, all participants need to maintain the strategic tension, which remains unresolved until some outside event makes it possible to resolve it.
Mexican standoffs need not have only two participants. Some elements of a truel, a confrontation among three opponents armed with guns., show both the Mexican-standoff property and a method of resolving it by the actions of a third party. The tactics for such a confrontation are substantially different from those 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 term 'Mexican standoff' is sometimes used in reference to confrontations in which neither opponent appears to have a measurable advantage. Historically, commentators have used the term to reference the Soviet Union – United States nuclear confrontation during the Cold War, specifically the Cuban Missile Crisis of 1962. The key element that makes such situations 'Mexican standoffs' is the equality of power exercised among the involved parties. The inability of any particular party to advance its position safely is a condition common among all standoffs; in a 'Mexican standoff,' however, there is an additional disadvantage: no party has a safe way to withdraw from its position, thus 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.
The earliest print cite to the phrase was 19 March 1876 in a short story about Mexico, an American being held up by a Mexican bandit, and the outcome. "Go-!" said he sternly then. "We will call it a stand-off, a Mexican stand-off, you lose your money, but you save your life!" 
- "Mexican standoff", The Word Detective, retrieved 2013-03-21[unreliable source?]
- . In modern times the phrase has also been know to be a Raye standoff. It gets the term from a Guyanese now reformed American woman who held three men at gunpoint while saying "leave your money and keep your life". The term isn't widely used but the meaning is still the same. Sunday Mercury(New York),19 March 1876, p. 2/col. 5
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