Editing Theory of Games and Economic Behavior

{{Short description|Book by John von Neumann}}
{{for|the mathematical journal with a similar name|Games and Economic Behavior{{!}}''Games and Economic Behavior''}}
{{Infobox book
| name          = Theory of Games and Economic&nbsp;Behavior
| image         = VNM-TGEB.jpg
| caption       = 60th anniversary edition, 2004
| author        = [[John von Neumann]], {{nowrap|[[Oskar Morgenstern]]}}
| country       = United States
| language      = English
| subject       = [[Game theory]]
| genre         = Non-fiction
| publisher     = [[Princeton University Press]]
| release_date  = 1944
| media_type    = Print, e-book
| pages         = xviii, 625&nbsp;p. (1st&nbsp;edition)
| isbn          = 978-0691130613
| isbn_note     = (60th anniversary edition)
| oclc          = 1629708
}}

'''''Theory of Games and Economic Behavior''''', published in 1944<ref>{{cite journal|author=Copeland, A. H.|author-link=Arthur Herbert Copeland|title=Review: ''Theory of Games and Economic Behavior'' by John von Neumann and Oskar Morgenstern|journal=Bull. Amer. Math. Soc.|year=1945|volume=51|issue=7|pages=498–504|url=http://www.ams.org/journals/bull/1945-51-07/S0002-9904-1945-08391-8/S0002-9904-1945-08391-8.pdf|doi=10.1090/s0002-9904-1945-08391-8|doi-access=free}}</ref> 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]].<ref>{{cite book |first=Philip |last=Mirowski |chapter=What Were von Neumann and Morgenstern Trying to Accomplish? |editor-first=E. Roy |editor-last=Weintraub |title=Toward a History of Game Theory |location=Durham |publisher=Duke University Press |year=1992 |isbn=0-8223-1253-0 |pages=113–147 |chapter-url=https://books.google.com/books?id=9CHY2Gozh1MC&pg=PA113 }}</ref><ref>{{Cite journal |last=Kattsoff |first=Louis O. |date=1945 |title=Review of Theory of Games and Economic Behavior. |url=https://www.jstor.org/stable/2572550 |journal=Social Forces |volume=24 |issue=2 |pages=245–246 |doi=10.2307/2572550 |jstor=2572550 |issn=0037-7732}}</ref><ref>{{Cite journal |last=K. |first=M. G. |date=1944 |title=Review of Theory of Games and Economic Behaviour |url=https://www.jstor.org/stable/2981222 |journal=Journal of the Royal Statistical Society |volume=107 |issue=3/4 |pages=293 |doi=10.2307/2981222 |jstor=2981222 |issn=0952-8385}}</ref><ref>{{Cite journal |last=Barna |first=T. |date=1946 |title=Review of Theory of Games and Economic Behaviour |url=https://www.jstor.org/stable/2550081 |journal=Economica |volume=13 |issue=50 |pages=136–138 |doi=10.2307/2550081 |issn=0013-0427}}</ref> 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."

==Overview==
The book is based partly on earlier research by von Neumann, published in 1928 under the German title "Zur Theorie der Gesellschaftsspiele" (''"On the Theory of Board Games"'').<ref>{{cite journal |first=John |last=von Neumann |title=Zur Theorie der Gesellschaftsspiele |journal=[[Mathematische Annalen]] |volume=100 |pages=295–300 |year=1928 | doi = 10.1007/bf01448847 |s2cid=122961988 }}</ref>

The derivation of [[expected utility]] from its axioms appeared in an appendix to the Second Edition (1947). [[John von Neumann|Von Neumann]] and [[Oskar Morgenstern|Morgenstern]] used objective probabilities, supposing that all the agents had the same probability distribution, as a convenience. However, Neumann and Morgenstern mentioned that a theory of [[subjective probability]] could be provided, and this task was completed by [[Leonard Jimmie Savage|Jimmie Savage]] in 1954 <ref>{{Cite book|title = The Foundations of Statistics|last = Savage|first = Leonard J.|publisher = Dover|year = 1954|location = New York}}</ref> and [[Johann Pfanzagl]] in 1967.<ref>An axiomatization for subjective expected utility appeared in Pfanzagl (1967, 1968) and was endorsed by Morgenstern (1976):
<!-- *{{cite book|author=Pfanzagl, J|year=1967|publisher=Princeton University Press|chapter=Subjective Probability Derived from the [[Oskar Morgenstern|Morgenstern]]-[[John von Neumann|von Neumann]] [[Expected utility|Utility Theory]]|pages=[https://archive.org/details/essaysinmathemat0000shub/page/237 237-251]|title=Essays in Mathematical Economics In Honor of Oskar Morgenstern|url=https://archive.org/details/essaysinmathemat0000shub|url-access=registration|editor=Martin Shubik|editor-link=Martin Shubik}}
*{{cite book|author=Pfanzagl, J. in cooperation with V. Baumann and H. Huber|year=1968|publisher=Wiley|chapter=Events, Utility and Subjective Probability|pages=195-220|title=Theory of Measurement}}
Pfanzagl's axiomatization was endorsed by [[Oskar Morgenstern]]: --> "Von Neumann and I have anticipated" the question whether probabilities "might, perhaps more typically, be subjective and have stated specifically that in the latter case axioms could be found from which could derive the desired numerical utility together with a number for the probabilities (c.f. p. 19 of ''The Theory of Games and Economic Behavior''). We did not carry this out; it was demonstrated by Pfanzagl . . . with all the necessary rigor" (page 65).
<!-- *{{cite book|author=Morgenstern, Oskar|author-link=Oskar Morgenstern|year=1976|publisher=New York University Press|chapter=Some Reflections on [[Expected utility|Utility]]|pages=65-70|title=Selected Economic Writings of Oskar Morgenstern|editor=Andrew Schotter}} -->
</ref>  Savage extended von Neumann and Morgenstern's axioms of rational preferences to endogenize probability and make it subjective.  He then used [[Bayes' theorem]] to update these subject probabilities in light of new information, thus linking rational choice and inference.

==See also==
*{{cite book|author=Pfanzagl, J|year=1967|publisher=Princeton University Press|chapter=Subjective Probability Derived from the [[Oskar Morgenstern|Morgenstern]]-[[John von Neumann|von Neumann]] [[Expected utility|Utility Theory]]|pages=[https://archive.org/details/essaysinmathemat0000shub/page/237 237–251]|title=Essays in Mathematical Economics In Honor of Oskar Morgenstern|url=https://archive.org/details/essaysinmathemat0000shub|url-access=registration|editor=Martin Shubik|editor-link=Martin Shubik}}
*{{cite book|author=Pfanzagl, J. in cooperation with V. Baumann and H. Huber|year=1968|publisher=Wiley|chapter=Events, Utility and Subjective Probability|pages=195–220|title=Theory of Measurement}}
*{{cite book|author=Morgenstern, Oskar|author-link=Oskar Morgenstern|year=1976|publisher=New York University Press|chapter=Some Reflections on [[Expected utility|Utility]]|pages=65–70|title=Selected Economic Writings of Oskar Morgenstern|editor=Andrew Schotter}}
* {{cite journal | author = Morgenstern Oskar | year = 1976 | title = The Collaboration Between Oskar Morgenstern and John von Neumann on the Theory of Games | journal = Journal of Economic Literature | volume = 14 | issue = 3| pages = 805–816 | jstor=2722628}}
* [http://press.princeton.edu/titles/7802.html Commemorative edition of the book ''Theory of Games and Economic Behavior'']
* {{cite journal | author = Copeland A. H. | year = 1945 | title = Review of 'The Theory of Games and Economic Behavior | journal = Bulletin of the American Mathematical Society | volume = 51 | pages = 498–504 | doi=10.1090/s0002-9904-1945-08391-8| doi-access = free }}
* {{cite journal | author = Hurwicz Leonid | author-link = Leonid Hurwicz | year = 1945 | title = The Theory of Economic Behavior | journal = American Economic Review | volume = 35 | issue = 5 | pages = 909–925 | jstor=1812602}}
* {{cite journal | author = Kaysen Carl | author-link = Carl Kaysen | year = 1946 | title = A Revolution in Economic Theory? | journal = Review of Economic Studies | volume = 14 | issue = 1| pages = 1–15 | doi=10.2307/2295753| jstor = 2295753 }}
* {{cite journal | author = Marschak Jacob | author-link = Jacob Marschak | year = 1946 | title = Neumann's and Morgenstern's New Approach to Static Economics | url = http://cowles.econ.yale.edu/P/cp/p00a/p0013b.pdf | journal = Journal of Political Economy | volume = 54 | issue = 2 | pages = 97–115 | doi=10.1086/256327| s2cid = 154536775 }}
* {{cite journal | author = Stone Richard | author-link = Richard Stone | year = 1948 | title = The Theory of Games | journal = Economic Journal | volume = 58 | issue = 230 | pages = 185–201 | doi = 10.2307/2225934 | jstor=2225934}}

==References==
{{Reflist}}

==External links==
* [https://archive.org/details/in.ernet.dli.2015.215284 Theory of Games and Economic Behavior], full text at archive.org (public domain)

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[[Category:1944 non-fiction books]]
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[[Category:Books about game theory]]
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[[Category:Collaborative non-fiction books]]