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

"The entire edifice of game theory rests on two theorems: von Neumann’s min-max theorem of 1928 and Nash’s equilibrium theorem of 1950" - Nasar (1998)

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).

The von Neumann-Morgenstern Collaboration (1938-43)

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…