A brief interpretive history of game theory

Game theory has, of course, a prehistory; but much as we can say that economics (as a distinct field of study) began with Adam Smith’s (1776/1994)1 Wealth of Nations, so we can say that game theory began with von Neumann and Morgenstern’s (1944/2004) book, The Theory of Games and Economic Behavior. Accordingly we shall pause only briefly over the prehistory. In 1913, Zermelo had initiated the mathematical literature on analysis of games. Borel had written important papers that seem to have influenced von Neumann (Poundstone, 1992, pp. 41-2). With a presentation in 1926 and publication of the paper in 1928, von Neumann (1928/1959) had set out many of the themes to recur in his book with Morgenstern, to which we will return. Aumann and Maschler (1985) find a cooperative solution concept in the Babylonian Talmud. A Korean scholar suggests to me that Sun Tzu should be considered a game theorist.2 Indeed it is likely that insights of game theory have often occurred to thoughtful people engaged in their own conflicts throughout much of history. See Paul Walker’s website for a schematic history of game theory, including several other “prehistoric” contributions.3

Morgenstern had used his example of Sherlock Holmes and Moriarty to illustrate problems of interactive decision, relating them to economics and forecasting, in a 1928 book and a 1935 paper (TGEB,4 pp. 712-14). By the mid-1930s the convergence of his ideas with those of von Neumann had been pointed out to Morgenstern, but Morgenstern was unable to pursue that direction until he had been dismissed from his position in Vienna by the new Nazi regime as “politically unbearable” (TGEB, p. 715).

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