Theory of Games and Economic Behavior
John von Neumann published a German paper titled Zur Theorie der Gesellschaftsspiele in 1928. This early work laid the groundwork for what would become a massive collaboration with economist Oskar Morgenstern. The Princeton University Press released their joint book Theory of Games and Economic Behavior in 1944. Von Neumann had been working on game theory concepts since the late 1920s, but the full economic application required Morgenstern's expertise. Their partnership transformed abstract mathematical ideas into a practical framework for understanding human decision-making. The authors approached the problem from different angles yet found common ground in strategic interaction.
The text introduces zero-sum games as a core concept where one player's gain equals another's loss. Von Neumann and Morgenstern used objective probabilities assuming all agents shared the same probability distribution. They noted that subjective probability theories could exist but left this task to future researchers. Jimmie Savage completed the development of subjective probability theory in 1954. Johann Pfanzagl later provided an axiomatization for subjective expected utility in 1967. Morgenstern acknowledged in 1976 that they had anticipated these questions but did not carry out the necessary rigorous demonstration themselves. The appendix to the Second Edition published in 1947 derived expected utility from its axioms.
A chapter titled Theory of Zero-Sum Two-Person Games appears early in the book's progression. Following this comes a section on Examples before moving to Three-Person Games Zero Sum games. The authors then offer a General Theory covering Zero-Sum N-Person Games. A dedicated chapter addresses Four-Person Zero-Sum games specifically. Later sections discuss Some Remarks Concerning N greater than or equal to 5 Participants Games. The final chapters cover Composition and Decomposition of Games, Simple Games, and General Non-Zero-Sum Games. An appendix at the end provides an Axiomatic Treatment of Utility. This structure moves systematically from simple two-player scenarios to complex multi-agent interactions.
Richard Stone wrote in 1948 that economists should view this book as the most important contribution since J.M. Keynes's General Theory appeared in 1936. Stone argued the work concerns individual behavior and coalitions formed by people attempting to better their situations. He noted it addressed problems found in value theory under conditions like duopoly and imperfect competition. The Economic Journal published Stone's assessment in Volume 58 Issue 230 on the 1st of June 1948. His review emphasized how the text directed attention toward economic problems previously unaddressed by existing theories. Stone believed the book fundamentally changed how economists approached strategic decision-making.
Herbert A. Simon praised the volume for its groundbreaking nature and lasting influence. The Princeton University Press released a 60th anniversary commemorative edition describing the book as the classic work upon which modern-day game theory is based. Today the text remains the foundational document for the interdisciplinary research field of game theory. Copies are available through archive.org as part of the public domain collection. The authors' original insights continue to shape economic analysis and strategic thinking across multiple disciplines. Their collaboration created a framework that persists more than eight decades after initial publication.
Common questions
When was Theory of Games and Economic Behavior published by John von Neumann?
Princeton University Press released the joint book Theory of Games and Economic Behavior in 1944. The authors approached the problem from different angles yet found common ground in strategic interaction.
Who collaborated with John von Neumann on game theory concepts?
Oskar Morgenstern provided the necessary expertise for the full economic application of John von Neumann's work. Their partnership transformed abstract mathematical ideas into a practical framework for understanding human decision-making.
What is the publication date of the Second Edition appendix to Theory of Games and Economic Behavior?
The appendix to the Second Edition derived expected utility from its axioms and was published in 1947. This section provides an Axiomatic Treatment of Utility at the end of the text.
How did Richard Stone describe the importance of John von Neumann's book in 1948?
Richard Stone wrote in 1948 that economists should view this book as the most important contribution since J.M. Keynes's General Theory appeared in 1936. He noted it addressed problems found in value theory under conditions like duopoly and imperfect competition.
When did Jimmie Savage complete the development of subjective probability theory?
Jimmie Savage completed the development of subjective probability theory in 1954. Von Neumann and Morgenstern used objective probabilities assuming all agents shared the same probability distribution but left subjective theories to future researchers.
All sources
12 references cited across the entry
- 1journalReview: Theory of Games and Economic Behavior by John von Neumann and Oskar MorgensternCopeland, A. H. — 1945
- 2bookToward a History of Game TheoryPhilip Mirowski — Duke University Press — 1992
- 3journalReview of Theory of Games and Economic Behavior.Louis O. Kattsoff — 1945
- 4journalReview of Theory of Games and Economic BehaviourM. G. K. — 1944
- 5journalReview of Theory of Games and Economic BehaviourT. Barna — 1946
- 6journalZur Theorie der GesellschaftsspieleJohn von Neumann — 1928
- 7bookThe Foundations of StatisticsLeonard J. Savage — Dover — 1954
- 10journalThe Theory of GamesRichard Stone — June 1948
- 11journalReview of Theory of Games and Economic Behavior by John von Neumann and Oskar MorgensternArthur Copeland — 1945
- 12journalReview of Theory of Games and Economic BehaviorHerbert A. Simon — 1945