Topic summary
Strategic interaction
Extracted from the Wikipedia article Game theory.
History
The significance of the work of the early game theorists in economics was its formalisation of strategic interaction, equilibrium concepts, and rational choice behavior, under the assumptions of perfect rationality, self-interest, complete information, and fixed game structure. Game theory as a field had its genesis in the 1944 book Theory of Games and Economic Behavior, written by mathematicians John von Neumann and Oskar Morgenstern. The book built upon von Neumann's earlier work, which used the Brouwer fixed-point theorem on continuous mappings into compact convex sets, a method that later became standard in game theory and mathematical economics. In 1994, the Nobel Prize in economics was awarded to the game theorists John Forbes Nash, Reinhard Selten, and John Harsanyi.