Theory of Games and Economic Behavior, published in 1944 by Princeton University Press, is a book by mathematician John von Neumann and economist Oskar Morgenstern which is considered the groundbreaking text that created the interdisciplinary research field of game theory. In the introduction of its 60th anniversary commemorative edition from the Princeton University Press, the book is described as "the classic work upon which modern-day game theory is based."
The book is based on prior research by von Neumann, published in 1928 under the German title "Zur Theorie der Gesellschaftsspiele" ("On the Theory of Parlor Games").
The derivation of expected utility from its axioms appeared in an appendix to the Second Edition (1947). Von Neumann and Morgenstern used objective probabilities, supposing that all the agents had the same probability distribution, as a convenience. However, von Neumann and Morgenstern mentioned that a theory of subjective probability could be provided, and this task was completed by Johann Pfanzagl in 1967.
Famous quotes containing the words games and/or economic:
“In 1600 the specialization of games and pastimes did not extend beyond infancy; after the age of three or four it decreased and disappeared. From then on the child played the same games as the adult, either with other children or with adults. . . . Conversely, adults used to play games which today only children play.”
—Philippe Ariés (20th century)
“When you overpay small people you frighten them. They know that their merits or activities entitle them to no such sums as they are receiving. As a result their boss soars out of economic into magic significance. He becomes a source of blessings rather than wages. Criticism is sacrilege, doubt is heresy.”
—Ben Hecht (1893–1964)