Game Theory and Public Policy, SECOND EDITION
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Game Theory and Public Policy, SECOND EDITION

Roger A. McCain

This book provides a critical, selective review of concepts from game theory and their applications in public policy, and further suggests some modifications for some of the models (chiefly in cooperative game theory) to improve their applicability to economics and public policy.
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Chapter 3: A brief interpretive history of game theory

Roger A. McCain

Extract

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) 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. 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.

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