writer : jotsna jari
❤️ John Charles Harsanyi ❤️
( May 29, 1920 – August 9, 2000)
He was a Hungarian Nobel Prize laureate economist. He moved to the United States in 1956, and spent most of his life there.
💚 Game Theory :
” In its first 30 years of existence, up to the mid 1970s, the practical applications of game theory were very limited, probably as a result of excessive preoccupation by game theorists with cooperative solution concepts.
In 1958, Anne and I returned to Australia, where I got a very attractive research position at the Australian National University in Canberra. But soon I felt very isolated because at that time game theory was virtually unknown in Australia.
After preliminary work by a number of other distinguished mathematicians and economists, game theory as a systematic theory started with von Neumann and Morgenstern’s book, ‘Theory of Games and Economic Behavior,’ published in 1944.
One might argue that proper understanding of any social situation would require game-theoretic analysis.”
Dr. J. C. Harsanyi was longtime professor at the University of California, Berkeley’s Haas School of Business and its Department of Economics.
He is best known for his contributions to the study of game theory and its application to economics, specifically for his developing the highly innovative analysis of games of incomplete information, so-called Bayesiangames.
He also made important contributions to the use of game theory and economic reasoning in political and moral philosophy (specifically utilitarian ethics) as well as contributing to the study of equilibrium selection.
Harsanyi was awarded the Nobel
Prize for his work in game theory, a mathematical theory of human behavior in competitive situations that has become a dominant tool for analyzing real-life conflicts in business, management and international relations.
A Nobel Prize gives its recipient brief public attention, and a permanent shimmer of fame. In this case the limelight was also brought to bear on game theory itself. Interest increased as game theorists became involved in the design of the auctions of radio frequency spectrum for the mobile telecommunications business. These raised billions of dollars in the United States and just recently tens of billions of pounds in Britain and Germany. With so much money at stake, it is likely that participants had started to use the sophisticated analysis suggested by game theory.
The strategic analysis of auctions relies heavily on Harsanyi’s most important work, on games with incomplete information, developed in the late 1960s. The “game” played in an auction is defined by more than just the auction’s rules. The players’ information plays a crucial role, since it determines the price they are willing to pay, and to some extent that is only known to themselves. Not only is this information relevant to a player, but also what the others know about that knowledge. (When you intend to buy a house, for example, you might prefer to conceal some of your enthusiasm from the seller.)
The game can only be analysed, however, reaching a conclusive recommendation for everyone, when all the information about it is fully known, including the uncertain parts about the players’ “types”, defined by their private information. Harsanyi resolved the intellectual muddle by adding an explicit “history” to a game that generates this uncertainty. With this modelling device, the game can be analysed consistently by classic game theory.
Harsanyi’s invention is now a standard tool of “information economics”. It broadened the use of game theory because, in real life, most people lack full knowledge about their opponents.
Harsanyi’s concepts and terminology are used so much that people tend to forget the struggle that led to them. In part, his great ideas were simple and clarifying, so that it is hard to identify why the problem was vexing in the first place.
Publications :-
- Harsanyi, John C. (October 1953). “Cardinal utility in welfare economics and in the theory of risk-taking”. Journal of Political Economy.
- Harsanyi, John C. (August 1955). “Cardinal welfare, individualistic ethics, and interpersonal comparisons of utility”. Journal of Political Economy.
- Harsanyi, John C. (March 1962). Bargaining in ignorance of the opponent utility function(PDF). Journal of Conflict Resolution.
- Harsanyi, John C. (November 1967). “Games with incomplete information played by “Bayesian” players, I-III. part I. The Basic Model”. Management Science. 14 (3): 159–182.
- Harsanyi, John C. (1976). Essays on Ethics, social behaviour and scientific explanation. Dordrecht, Holland Boston: D. Reidel Pub.
- Harsanyi, John C. (1977). Rational behavior & bargaining, equilibrium in games and social situations. Cambridge England New York: Cambridge University Press.
- Harsanyi, John C. (Winter 1977). “Morality and the theory of rational behavior”. Social Research. 44 (4): 623–656.
Reprinted as: Harsanyi, John C. (1982), “Morality and the theory of rational behaviour”, in SenAmartya,Williams,Bernard(eds.), Utilitarianism and beyond, Cambridge: Cambridge University Press, pp. 39–62.
- Harsanyi, John C. (1982). Papers in game theory. Dordrecht, Holland Boston U.S.A. Hingham, Massachusetts: D. Reidel Pub. Co.
- Harsanyi, John C.; Selten, Reinhard (1988). A general theory of equilibrium selection in games. Cambridge, Massachusetts: MIT Press.
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“In principle, every social situation involves strategic interaction among the participants.” – J. C. Harsanyi.
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