A Mexican standoff is most precisely a confrontation between three opponents, facing each other. The tactics for such a confrontation are substantially different than for a duel with only two opponents, where the first to shoot has the advantage. In a confrontation with 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. 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.
In financial circles, the Mexican Standoff is typically used to connote a situation where one side wants something, like a concession of some sort, and is offering nothing of value, and the other side sees no value in agreeing to any changes so refuses to negotiate. Although both sides can benefit from the change, neither side can agree to a compensation value 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.[1]
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The Mexican standoff is now considered a movie cliché through its frequent use as a plot device in motion pictures.
Some examples used in movies include:
Nevertheless, it remains a staple in popular culture because of its potential for high-tension drama.