This lecture has several goals. First, I would like to convey a sense of the initial reaction to the publication in 1944 of ”The Theory of Games and Economic Behavior” by von Neumann and Morgenstern, a radically new approach to economic theory. Then, we shall survey the subsequent development of the theory of games, attempting to explain the apparent dissonance between the tenor of the book reviews and the response by the communities of economists and mathematicians. As a participant in this response (from the summer of 1948), my account is necessarily colored by subjective and selective recollections. Finally, as the theory of games moved to the center of economic theory, as recognized by three Nobel awards in Economic Science, the relative roles of mathematicians and economists were reversed. We shall describe this reversal and attempt to evaluate its consequences for both mathematical and economic research.
Group for Research in Decision Analysis