Theory of Games and Economic Behavior: 60th Anniversary Commemorative Edition / Edition 60

by John von Neumann, Oskar Morgenstern, Harold W. Kuhn, Ariel Rubinstein

Overview

This is the classic work upon which modern-day game theory is based. What began more than sixty years ago as a modest proposal that a mathematician and an economist write a short paper together blossomed, in 1944, when Princeton University Press published Theory of Games and Economic Behavior. In it, John von Neumann and Oskar Morgenstern conceived a groundbreaking mathematical theory of economic and social organization, based on a theory of games of strategy. Not only would this revolutionize economics, but the entirely new field of scientific inquiry it yielded—game theory—has since been widely used to analyze a host of real-world phenomena from arms races to optimal policy choices of presidential candidates, from vaccination policy to major league baseball salary negotiations. And it is today established throughout both the social sciences and a wide range of other sciences.


This sixtieth anniversary edition includes not only the original text but also an introduction by Harold Kuhn, an afterword by Ariel Rubinstein, and reviews and articles on the book that appeared at the time of its original publication in the New York Times, tthe American Economic Review, and a variety of other publications. Together, these writings provide readers a matchless opportunity to more fully appreciate a work whose influence will yet resound for generations to come.

Product Details

ISBN-13:	9780691130613
Publisher:	Princeton University Press
Publication date:	04/08/2007
Series:	Princeton Classic Editions Series
Edition description:	60th Anniversary Commemorative Edition
Pages:	776
Sales rank:	589,756
Product dimensions:	6.00(w) x 9.25(h) x (d)

About the Author

John von Neumann (1903-1957) was one of the greatest mathematicians of the twentieth century and a pioneering figure in computer science. A native of Hungary who held professorships in Germany, he was appointed Professor of Mathematics at the Institute for Advanced Study (IAS) in 1933. Later he worked on the Manhattan Project, helped develop the IAS computer, and was a consultant to IBM. An important influence on many fields of mathematics, he is the author of Functional Operators, Mathematical Foundations of Quantum Mechanics, and Continuous Geometry (all Princeton). Oskar Morgenstern (1902-1977) taught at the University of Vienna and directed the Austrian Institute of Business Cycle Research before settling in the United States in 1938. There he joined the faculty of Princeton University, eventually becoming a professor and from 1948 directing its econometric research program. He advised the United States government on a wide variety of subjects. Though most famous for the book he co-authored with von Neumann, Morgenstern was also widely known for his skepticism about economic measurement, as reflected in one of his many other books, On the Accuracy of Economic Observations (Princeton). Harold Kuhn is Professor Emeritus of Mathematical Economics at Princeton University. Ariel Rubinstein is Professor of Economics at Tel Aviv University and at New York University.

Table of Contents

PREFACE v
TECHNICAL NOTE v
ACKNOWLEDGMENT x
CHAPTER I: FORMULATION OF THE ECONOMIC PROBLEM
1. THE MATHEMATICAL METHOD IN ECONOMICS 1
2. QUALITATIVE DISCUSSION OF THE PROBLEM OF RATIONAL BEHAVIOR 8
3. THE NOTION OF UTILITY 15
4. STRUCTURE OF THE THEORY: SOLUTIONS AND STANDARDS OF BEHAVIOR 31
CHAPTER II: GENERAL FORMAL DESCRIPTION OF GAMES OF STRATEGY
5. Introduction 46
6. THE SIMPLIFIED CONCEPT OF A GAME 48
7. THE COMPLETE CONCEPT OF A GAME 55
8. SETS AND PARTITIONS 60
*9. THE SET-THEORETICAL DESCRIPTION OF A CAME 67
*10. AXIOMATIC FORMULATION 73
11. STRATEGIES AND THE FINAL SIMPLIFICATION OF THE DESCRIPTION OF THE GAME 79
CHAPTER III: ZERO-SUM TWO-PERSON GAMES: THEORY
12. PRELIMINARY SURVEY 85
13. FUNCTIONAL CALCULUS 88
14. STRICTLY DETERMINED GAMES 98
*15. GAMES WITH PERFECT INFORMATION
16. LINEARITY AND CONVEXITY 128
17. MIXED STRATEGIES. THE SOLUTION FOR ALL GAMES 143
CHAPTER IV: ZERO-SUM TWO-PERSON GAMES: EXAMPLES
18. SOME ELEMENTARY GAMES 169
*19. POKER AND BLUFFING 186
CHAPTER V: ZERO-SUM THREE-PERSON GAMES
20. PRELIMINARY SURVEY 220
21. THE SIMPLE MAJORITY GAME OF THREE PERSONS 222
22. FURTHER EXAMPLES 225
23. THE GENERAL CASE 231
24. DISCUSSION OF AN OBJECTION 233
CHAPTER VI: FORMULATION OF THE GENERAL THEORY: ZERO-SUM n-PERSON GAMES
25. THE CHARACTERISTIC FUNCTION 238
26. CONSTRUCTION OF A GAME WITH A GIVEN CHARACTERISTIC FUNCTION 243
27. STRATEGIC EQUIVALENCE. INESSENTIAL AND ESSENTIAL GAMES 245
28. GROUPS, SYMMETRY AND FAIRNESS 255
29. RECONSIDERATION OF THE ZERO-SUM THREE-PERSON GAME 260
30. THE EXACT FORM OF THE GENERALDEFINITIONS 263
31. FIRST CONSEQUENCES 272
32. DETERMINATION OF ALL SOLUTIONS OF THE ESSENTIAL ZERO-SUM THREE-PERSON GAME 282
33. CONCLUSIONS 288
CHAPTER VII: ZERO-SUM FOUR-PERSON GAMES
34. PRELIMINARY SURVEY 291
35. DISCUSSION OF SOME SPECIAL POINTS IN THE CUBE Q 295
36. DISCUSSION OF THE MAIN DIAGONALS 304
37. THE CENTER AND ITS ENVIRONS 313
*38. A FAMILY OF SOLUTIONS FOR A NEIGHBORHOOD OF THE CENTER 321
CHAPTER VIII: SOME REMARKS CONCERNING n [equal to or greater than] 5 PARTICIPANTS
39. THE NUMBER OF PARAMETERS IN VARIOUS CLASSES OF GAMES 330
40. THE SYMMETRIC FIVE PERSON GAME 332
CHAPTER IX: COMPOSITION AND DECOMPOSITION OF GAMES
41. COMPOSITION AND DECOMPOSITION 339
42. MODIFICATION OF THE THEORY 345
43. THE DECOMPOSITION PARTITION 353
44. DECOMPOSABLE GAMES. FURTHER EXTENSION OF THE THEORY 358
45. LIMITATIONS OF THE EXCESS. STRUCTURE OF THE EXTENDED THEORY 378
46. DETERMINATION OF ALL SOLUTIONS OF A DECOMPOSABLE GAME 381
47. THE ESSENTIAL THREE-PERSON GAME IN THE NEW THEORY 403
CHAPTER X: SIMPLE GAMES
48. WINNING AND LOSING COALITIONS AND GAMES WHERE THEY OCCUR 420
49. CHARACTERIZATION OF THE SIMPLE GAMES 423
50. THE MAJORITY GAMES AND THE MAIN SOLUTION 431
51. METHODS FOR THE ENUMERATION OF ALL SIMPLE GAMES 445
52. THE SIMPLE GAMES FOR SMALL n 457
53. THE NEW POSSIBILITIES OF SIMPLE GAMES FOR n [equal to or greater than] 6 463
54. DETERMINATION OF ALL SOLUTIONS IN SUITABLE GAMES 470
*55. THE SIMPLE GAME [1, ^{. . .} , 1, n - 2]_h 473
CHAPTER XI: GENERAL NON-ZERO-SUM GAMES
56. EXTENSION OF THE THEORY 504
57. THE CHARACTERISTIC FUNCTION AND RELATED TOPICS 527
58. INTERPRETATION OF THE CHARACTERISTIC FUNCTION 538
59. GENERAL CONSIDERATIONS 542
60. THE SOLUTIONS OF ALL GENERAL GAMES WITH n [equal to or less than] 3 548
61. ECONOMIC INTERPRETATION OF THE RESULTS FOR n = 1, 2 555
62. ECONOMIC INTERPRETATION OF THE RESULTS FOR n = 3: SPECIAL CASE 564
63. ECONOMIC INTERPRETATION OF THE RESULTS FOR n = 3: GENERAL CASE 573
64. THE GENERAL MARKET 583
CHAPTER XII: EXTENSION OF THE CONCEPTS OF DOMINATION AND SOLUTION
65. THE EXTENSION. SPECIAL CASES 587
66. GENERALIZATION OF THE CONCEPT OF UTILITY 603
67. DISCUSSION OF AN EXAMPLE 608
APPENDIX: THE AXIOMATIC TREATMENT OF UTILITY 617
INDEX OF FIGURES 633
INDEX OF NAMES 634
INDEX OF SUBJECTS 635

Editorial Reviews

"Praise for Princeton's previous edition: "A rich and multifaceted work. . . . [S]ixty years later, the Theory of Games may indeed be viewed as one of the landmarks of twentieth-century social science."—-Robert J. Leonard, History of Political Economics

"Praise for Princeton's previous edition: Opinions still vary on the success of the project to put economics on a sound mathematical footing, but game theory was eventually hugely influential, especially on mathematics and the study of automata. Every self-respecting library must have one."—-Mike Holderness, New Scientist

"While the jury is still out on the success or failure of game theory as an attempted palace coup within the economics community, few would deny that interest in the subject—as measured in numbers of journal page—is at or near an all-time high. For that reason alone, this handsome new edition of von Neumann and Morgenstern's still controversial classic should be welcomed by the entire research community."—-James Case, SIAM News

From the Publisher

"One cannot but admire the audacity of vision, the perseverance in details, and the depth of thought displayed in almost every page of the book. . . . The appearance of a book of [this] calibre . . . is indeed a rare event."

The American Economic Review

While the jury is still out on the success or failure of game theory as an attempted palace coup within the economics community, few would deny that interest in the subject—as measured in numbers of journal page—is at or near an all-time high. For that reason alone, this handsome new edition of von Neumann and Morgenstern's still controversial classic should be welcomed by the entire research community.

SIAM News - James Case

Praise for Princeton's previous edition: Opinions still vary on the success of the project to put economics on a sound mathematical footing, but game theory was eventually hugely influential, especially on mathematics and the study of automata. Every self-respecting library must have one.

New Scientist - Mike Holderness

Praise for Princeton's previous edition: A rich and multifaceted work. . . . [S]ixty years later, the Theory of Games may indeed be viewed as one of the landmarks of twentieth-century social science.

History of Political Economics - Robert J. Leonard

While the jury is still out on the success or failure of game theory as an attempted palace coup within the economics community, few would deny that interest in the subject—as measured in numbers of journal page—is at or near an all-time high. For that reason alone, this handsome new edition of von Neumann and Morgenstern's still controversial classic should be welcomed by the entire research community.
— James Case

SIAM News

Praise for Princeton's previous edition: Opinions still vary on the success of the project to put economics on a sound mathematical footing, but game theory was eventually hugely influential, especially on mathematics and the study of automata. Every self-respecting library must have one.
— Mike Holderness

New Scientist

Praise for Princeton's previous edition: A rich and multifaceted work. . . . [S]ixty years later, the Theory of Games may indeed be viewed as one of the landmarks of twentieth-century social science.
— Robert J. Leonard

History of Political Economics

Posterity may regard this book as one of the major scientific achievements of the first half of the twentieth century. This will undoubtedly be the case if the authors have succeeded in establishing a new exact science--the science of economics. The foundation which they have laid is extremely promising.

The Bulletin of the American Mathematical Society

The main achievement of the book lies, more than in its concrete results, in its having introduced into economics the tools of modern logic and in using them with an astounding power of generalization.

The Journal of Political Economy