MANAGEMENT is efficiency in climbing the ladder of success; LEADERSHIP determines whether the ladder is leaning against the right wall - Stephen Covey

Monday, December 12, 2005

Nobel Prize 2005

The Royal Swedish Academy of Sciences has decided to award the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, 2005, jointly to Prof. Robert J. Aumann (Center for Rationality, Hebrew University of Jerusalem Jerusalem, Israel) and Prof. Thomas C. Schelling (Department of Economics and School of Public Policy, University of Maryland College Park, MD, USA) for having enhanced the understanding of conflict and cooperation through game-theory analysis. As described by Prof. Jörgen Weibull, Member, the Royal Swedish Academy of Sciences, Chairman of the Economics Prize Committee, Game Theory is all about strategic interaction. Such interaction may occur within or between families, local communities, firms, organizations or whole countries. In most instances, no single party, or "player", can determine the outcome single-handedly; the result of interaction depends on everyone's behavior. Just as in chess or bridge, a player's best move thus depends on the moves that have been and will be made by other players. Consequently, in strategic interactions each player acts on the information at his or her disposal, as well as on expectations of others' future actions. However, others' actions depend, in turn, on their information and expectations about your actions, so all players' actions, information and expectations are intertwined in a complex and fascinating pattern. The analysis of strategic interaction, with due regard to these complexities, is precisely what game theory is all about.


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