john nash
TRANSCRIPT
JOHN FORBES NASH, JR.
Who is John Nash?
• John Nash is a mathematician and economistwho concentrated primarily on game theoryand differential geometry
• His work in game theory, especially the “Nashequilibrium,” has reshaped modern economicthought
• He won the 1994 Nobel Prize in Economicsfor the Nash equilibrium
His life
• Born in 1928, in Bluefield, WV• He was a child prodigy• He created board games and
conducted science experiments in hisbedroom
• Got his PhD at Princeton University in1950
Game Theory
• Game theory is the study of “games,”strategic situations in which a personmust make decisions that affect theoutcome for both himself and the otherplayers
• Game theory is a branch ofmathematics, but it obviously applies toeconomics
The Nash equilibrium
• “If each player’s strategy is the bestpossible considering every otherplayer’s strategy, then the game is inequilibrium, and will not change.”
• No player can benefit by unilaterallychanging his or her strategy
Nash Equilibrium in Action:The Arms Race
USSR
US
Produce moreweapons
Stop producingweapons
Produce moreweapons
Option A: US andUSSR both haveweapons
Option B: US hasweaponsUSSR has lessweapons
Stop producingweapons
Option C: USSR hasweaponsUS has less weapons
Option D: US andUSSR both have lessweapons
Imagine that the US and USSR only had the options toeither build more weapons or stop building weaponscompletely, and that the Arms Race could be simplifiedinto the four outcomes described in the table.
The Arms Race• Regardless of what the USSR chose to
do, it would have been advantageousfor the US to build more weapons, andvice versa
• Thus, a game structured this way willtend towards Option A
Later Life
• In the 1960s, Nash developedschizophrenia
• He suffered from it until at least the1990s
• The movie A Beautiful Mind (2001) wasbased on his life
Bibliography• "A Brief Introduction to Non-Cooperative Game Theory."
Rensselaer at Hartford. Rensselaer Polytechnic Institute, 14 Mar.2001. Web. 22 Sept. 2009.<http://www.rh.edu/~stodder/BE/IntroGameT.htm>.
• Barry, P. (2008, November). Nash's math gets morebeautiful. Science News, 174(10), 10. Retrieved September 22,2009, from KidQuest Magazines.
• "Game Theory." Stanford Encyclopedia of Philosophy. 25 Jan.1997. Web. 27 Sept. 2009. <http://plato.stanford.edu/entries/game-theory/>.
• Nash, John F. "John F. Nash, Jr.: Autobiography." Nobelprize.org.The Nobel Foundation, 1994. Web. 22 Sept. 2009.
• Kuhn, H. W., and S. Nasar, eds. The Essential John Nash.Princeton, NJ: Princeton UP, 2001.
• Wright, Robert. "Nash Equilibrium." Slate. Newsweek InteractiveCo., 22 Mar. 2002. Web. 27 Sept. 2009. <www.slate.com>.