Two Game Theorists Win the Nobel Prize for Economics

[bemildred]

Cross post from LBN. One of the winners is an observant
dual-citizenship Israeli Jew, with some interesting things to say.

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For example, two countries that trade together could find themselves in conflict over a specific product. Traditional power politics would argue that one country should force the other to bow to its will.

But Schelling, in his 1960 book "The Strategy of Conflict," explained that a party could have long-term success by giving up some short-term advantages, even if that meant worsening its own options. By making concessions, the stronger party could build trust with the other party and that long-term relationship could be more beneficial to both.

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During a news conference Monday in Jerusalem, Aumann said conflict in the Middle East was perfect fodder for game-theory analysis of continuing conflict.

"That's what it is. It's an ongoing conflict," said Aumann, with a lively demeanor and a white beard that reaches to his breast pocket. "It's been going on for at least 80 years — more than 80 years. As far as I can see, it's going to go on for at least another 80 years."

LA Times