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).
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…
