Our coverage on the award of the Nobel prize for economics to John Nash in 1994
The games economists play | Oct 15th 1994
Game theory is now part of almost every economist's tool-kit, as this week's Nobel economics prize recognises
IT SOUNDS like a sports fan's dream. In Stockholm on October 11th, three men shared a $1m prize for their skill at analysing games. They are not television pundits, or armchair critics of Manchester United or the Miami Dolphins, but economists. Two Americans, John Harsanyi and John Nash, and a German, Reinhard Selten, have won this year's Nobel prize for economics for their studies of "game theory".
Game theory may sound trivial. It is not. In the past 20 years or so it has revolutionised the economics of industrial organisation and has influenced many other branches of the subject, notably the theories of monetary policy and international trade. These days, no economics students can hope to graduate without knowing the rudiments of it.
Odd though it may seem, until game theory came along most economists...Continue reading