- Person
- Robert Aumann
- Lived
- b. 1930
- Field
- Game theory
- From
- Israeli-American
The story
Robert Aumann was born in Frankfurt in 1930 to an Orthodox Jewish family that left Nazi Germany for New York in 1938, two weeks before the Kristallnacht pogrom. His parents lost all their assets in the move but still gave their two sons an excellent Jewish and general education. He trained as a mathematician at City College and MIT, and in 1956 joined the Hebrew University of Jerusalem, where he later became a professor at its Center for the Study of Rationality.
His greatest contribution was the theory of repeated games: situations in which the same players face the same strategic choice over and over. In a single encounter, self-interested players often do best by betraying each other, as when two neighbouring petrol stations undercut each other's prices until neither makes a profit. Aumann showed rigorously that when people expect to deal with each other again, cooperation can be sustained, because the prospect of future losses outweighs the gain from cheating now.
The work began with his 1959 paper on acceptable points in cooperative games, perhaps the first rigorous general treatment of repeated games. It showed a deep link between stable behaviour in a repeated game and cooperative outcomes in a one-time game. In the course of that work he became aware of what later became known as the Folk Theorem, but thought it too simple to publish, a decision he later called a big mistake. With Lloyd Shapley he later sharpened the theory further.
In 2005 Aumann shared the Nobel Memorial Prize in Economic Sciences with Thomas Schelling for having enhanced the understanding of conflict and cooperation through game-theory analysis. The Royal Swedish Academy of Sciences credited him with the first full formal analysis of infinitely repeated games, identifying exactly which outcomes can be upheld over time in long-run relationships. The theory explains why cooperation is harder when there are many participants, when they interact rarely, when the time horizon is short or when others' actions cannot be clearly seen.
He titled his Nobel lecture "War and Peace", arguing that war must be studied scientifically if it is to be understood and eventually prevented. The academy noted that his approach helps explain price wars and trade wars, why some communities manage shared resources better than others, and the purpose of institutions ranging from merchant guilds to wage negotiations and international trade agreements.
Why it matters
Aumann's theory gives economists, diplomats and policymakers a precise way to design institutions and agreements in which cooperation, rather than conflict, is the stable outcome.
About Robert Aumann
German-born Orthodox Jewish mathematician in Jerusalem whose theory of repeated games showed how cooperation can last between rivals; Nobel Prize in Economics 2005.
More about Robert Aumann
- Robert Aumann co-founded Jerusalem's Center for RationalityAround 1990–91 Robert Aumann helped found the Center for Rationality at the Hebrew University of Jerusalem, a game theory centre drawing members from more than a dozen departments.
- Robert Aumann proved rational people can't agree to disagreeIn his 1976 paper Agreeing to Disagree, Robert Aumann gave the first formal definition of common knowledge and proved that rational people sharing the same starting beliefs cannot agree to disagree.
- Robert Aumann invented correlated equilibriumRobert Aumann was the first to define correlated equilibrium, a broader idea than the Nash equilibrium that shows how a shared signal or mediator can help rivals coordinate.
- A nuclear defence puzzle drew Robert Aumann to game theoryRobert Aumann, trained in pure mathematics, turned to game theory in the 1950s to solve a practical problem: how to defend a city against bombers when most of them are decoys.
- Robert Aumann's game theory served nuclear arms controlIn the mid-1960s Robert Aumann and Michael Maschler developed the theory of repeated games with incomplete information for a US agency preparing arms control talks with the Soviet Union.
- Robert Aumann and Lloyd Shapley analysed games of the manyWith Lloyd Shapley, Robert Aumann wrote Values of Non-Atomic Games in 1974, extending game theory to markets and elections with huge numbers of players and giving rise to the Aumann–Shapley value.
- Robert Aumann trained a generation of game theoristsRobert Aumann's doctoral students at the Hebrew University include Sergiu Hart, Abraham Neyman, David Schmeidler and Yair Tauman, each a leading figure in game theory.
Sources
- Robert J. Aumann: Biographical Nobel Prize
- Robert Aumann Wikipedia
- The Prize in Economic Sciences 2005: Press release NobelPrize.org
Another act of tikkun olam. This is part of tikkun olam, the Jewish idea of repairing the world, and every one of us can add to it.