Barry Nalebuff on the History of Game Theory

Question: What is Game Theory?

Barry Nalebuff: Game theory is a science of strategy. It’s anticipating how others will respond to what you are doing and realizing that you can actually change what they are doing.

In Physics, there’s the Third Law: For every action, there is a reaction equal and opposite. But in game theory, you could influence what the other person’s reaction is. It’s not programmed. You can change it.

Question: What is the history of game theory?

Barry Nalebuff: Since game theory is a science of strategy, and people have been thinking strategically forever, you can go back to the Peloponnesian War.

But I think, as a real science, in terms of being mathematized, being formalized, it goes back to Von Neumann and Morgenstern and really just about 55 years ago. It was during the war [i.e. WWII], in terms of thinking about how to locate enemy submarines and the cat and mouse game is where it began.

It started really with zero sum games, the notion that, I’ll find your sub, I’ll destroy you before you destroy me. So one person wins and one person losses.

Then John Nash, who later became famous with “A Beautiful Mind,” created the next important development, which is cooperative games; understanding that games don’t have to be just be zero sum. He gave us the concept of, what’s now called Nash equilibrium, basically a resting point for a game. A place where what I’m doing is best, given what I think you’re doing. And what you are doing is best, given what you believe that I’m doing.

And, one, it wasn’t clear that games all have such a resting point. And he showed that pretty much they do, though not always in something called the pure strategies, or a fixed strategy, like sometimes in football or in tennis I’ll [IB] your forehand or backhand or I have to bluff.

But when you allow that type of general strategies, then Nash showed that each game does have such a happy end point.

It is important to remember actually that solution to the game isn’t always a good solution. So just because people are happy with what they are doing, doesn’t mean it’s good for society.

Recorded on: Oct 2, 2008


Barry Nalebuff explains the basis of Game Theory.

Afghanistan is the most depressed country on earth

No, depression is not just a type of 'affluenza' – poor people in conflict zones are more likely candidates

Image: Our World in Data / CC BY
Strange Maps
  • Often seen as typical of rich societies, depression is actually more prevalent in poor, conflict-ridden countries
  • More than one in five Afghans is clinically depressed – a sad world record
  • But are North Koreans really the world's 'fourth least depressed' people?
Keep reading Show less

Banned books: 10 of the most-challenged books in America

America isn't immune to attempts to remove books from libraries and schools, here are ten frequent targets and why you ought to go check them out.

Nazis burn books on a huge bonfire of 'anti-German' literature in the Opernplatz, Berlin. (Photo by Keystone/Getty Images)
Culture & Religion
  • Even in America, books are frequently challenged and removed from schools and public libraries.
  • Every year, the American Library Association puts on Banned Books Week to draw attention to this fact.
  • Some of the books they include on their list of most frequently challenged are some of the greatest, most beloved, and entertaining books there are.
Keep reading Show less
  • Oumuamua, a quarter-mile long asteroid tumbling through space, is Hawaiian for "scout", or "the first of many".
  • It was given this name because it came from another solar system.
  • Some claimed 'Oumuamua was an alien technology, but there's no actual evidence for that.