game theory and economic analysis a quiet revolution in economics - christian schmidt

[...]... editorial matter and selection © 2002 Christian Schmidt; individual chapters © the contributors 1 Von Neumann and Morgenstern in historical perspective Robert W Dimand and Mary Ann Dimand Introduction John Von Neumann’s and Oskar Morgenstern’s Theory of Games and Economic Behavior (TGEB) (1944) made great advances in the analysis of strategic games and in the axiomatization of measurable utility theory, and. .. Continental European mathematicians Von Neumann and Morgenstern thrust strategic games above the horizon of the economics profession Their work was the basis for postwar research in game theory, initially as a specialized field with applications to military strategy and statistical decision theory, but eventually permeating industrial organization and public choice and in uencing macroeconomics and international... mimeograph copy Aumann, R J (1999), “Interactive epistemology: I and II,” International Journal of Game Theory, 28, 265–319 Binmore, K (1987), “Modeling rational players,” Economics and Philosophy, 3 and 4 Binmore, K (1996), Introduction to Essays on Game Theory, J F Nash, Cheltenham, Edward Elgar Binmore, K and Dasgupta, P (1986), eds, Economic Organizations as Games, Oxford, Basil Blackwell Binmore, K and. .. his mathematical training and ability and that of Von Neumann and Wald, he was well acquainted with the existing body of mathematical economics, and his mathematical knowledge was distinguished for the economics profession of his time Morgenstern (1931: 366) offered a strikingly heretical reinterpretation of Austrian economics and its founder Carl Menger: “Although Menger did not employ mathematical symbols... axiomatic approach of Von Neumann and Morgenstern may also have in uenced the axiomatic approach to social choice and general equilibrium theory adopted by such Cowles economists as Arrow and Debreu Whitehead and Russell had attempted an axiomatization of the foundations of mathematics decades before in their Principia Mathematica, and Kolmogorov (1933) had axiomatized the mathematical theory of probability,... analysis than Von Neumann would have offered to an audience of mathematicians Apart from its effect on Abraham Wald and a few other contributors to Annals of Mathematics, the impact of the Theory of Games was mediated through the efforts of a small group of eminent and soon-to-be-eminent scholars who read and digested the work, and wrote major review articles The amount of space accorded these reviews and. .. individual chapters © the contributors At the end of the 1970s, the connections between game theory and economics entered a new phase The game theory approach had progressively invaded the majority of sectors of economic analysis Such was the case first of all with industrial economy, which was renewed by the contribution of games Insurance economics, then monetary economics and financial economics and. .. convexity, independent of any economic interpretation of it that might be given The reasons for Von Neumann’s collaboration with Morgenstern go beyond the realm of science Finally and above all, their work together did not in fact culminate in the announced fusion of game mathematics and the analysis of economic situations Two-thirds of Theory of Games and Economic Behavior are devoted to zero-sum games, and. .. articles by Nash, Shubik, and others in Econometrica The economics profession as a whole in the late 1940s and the 1950s did not take up the interest in game theory encouraged by the book reviewers and shared by Princeton’s mathematics department and the strategists at the RAND Corporation and Office of Naval Research The sheer size of the Theory of Games and the mass of mathematical notation, which turned... with mathematical reasoning and used to thinking about competitive equilibrium rather than strategic interaction Herbert Simon (1991: 326) recalls that In 1950, it was still difficult to get a paper published in the American Economic Review if it contained equations (diagrams were more acceptable).” Hurwicz’s review article, reprinted in the American Economic Association Readings in Price Theory and in . Publication Data Game theory and economic analysis / [edited by] Christian Schmidt. p. cm. – (Routledge advances in game theory; 001) Includes bibliographical references and index. 1. Game theory. 2. Economics. . fusion of game mathematics and the analysis of economic situ- ations. Two-thirds of Theory of Games and Economic Behavior are devoted to zero-sum games, and non-zero-sum games are handled with recourse. mechanisms and individual incentives CLAUDE D’ASPREMONT AND LOUIS-ANDRÉ GÉRARD-VARET 9 Team models as a framework to analyze coordination problems within the firm JEAN-PIERRE PONSSARD, SÉBASTIEN STEINMETZ,