In the last few years I’ve written extensively on the collaboration between Oskar Morgenstern (1902-77) and John von Neumann (1903-1957) on the de

Nash's Invention of Non-Cooperative Game Theory (1949-50)

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2024-11-06 00:00:38

In the last few years I’ve written extensively on the collaboration between Oskar Morgenstern (1902-77) and John von Neumann (1903-1957) on the development of cooperative game theory, the theory of coalition formation with external enforcements of behavior (read: contract theory). Their joint work, a twelve-hundred-page manuscript, is what became the book Theory of Games and Economic Behavior* , published by Princeton University Press in 1944 (see essay below). The book summarizes the two authors’ efforts to construct a “systematic theory of rational human behavior by focusing on games as simple settings for the exercise of human rationality” (Nasar, 1998).

As Nasar writes, “when the book appeared in 1944, von Neumann’s reputation was at its peak. It got the kind of public attention — including a breathless front-page story in the New York Times — that no other densely mathematical work had ever received” (Nasar, 1998). The timing, as Morgenstern had predicted, was perfect. World War II drew to a close in 1945 and new states, new borders and new, very very powerful weapons unleashed “a search for systematic attacks of all sorts of problems in a wide variety of fields” (Nasar, 1998).

The only issue was that von Neumann and Morgenstern’s book didn’t actually present any new solutions, only reformulations of old ones, such as von Neumann’s 1928 “minimax theorem” (see essay below).