John Harsanyi

John Harsanyi (1920–2000) was a Hungarian-American economist and game theorist who developed Bayesian game theory and shared the 1994 Nobel Memorial Prize in Economic Sciences.

Game theory: The mathematical study of strategic interaction among decision-makers. Harsanyi made game theory capable of representing players who do not know one another’s payoffs.
Bayesian game: A game in which players have private information, represented by types, about relevant features of the interaction. This is the framework Harsanyi devised for analyzing games with incomplete information.
Budapest: The capital of Hungary, formed in 1873 by the unification of Buda, Óbuda, and Pest. Harsanyi was born and educated in Budapest before wartime persecution forced him into hiding.
John von Neumann: A Hungarian-American mathematician whose work helped establish modern game theory and computer science. His foundational game-theoretic framework preceded Harsanyi’s analysis of private information.
Auction theory: The study of auction formats, bidding strategies, and the allocation of goods through auctions. Bidders’ private valuations make auctions natural applications of Bayesian games.
Bayesian probability: A framework for updating probabilities as evidence arrives, using Bayes’ theorem. Bayesian reasoning supplies the probabilities over private information in his games.
Harsanyi transformation: A representation of an incomplete-information game as a Bayesian game in which nature first draws players’ types. It converts uncertainty about players into a formal sequence of chance and strategic moves.
World War II in Hungary: The period from 1939 to 1945, when Hungary entered the war and endured German occupation and Soviet invasion. The Holocaust in Hungary shaped Harsanyi’s survival and later emigration.
Oskar Morgenstern: An Austrian-American economist who coauthored the foundational book Theory of Games and Economic Behavior. Morgenstern and von Neumann established the strategic framework Harsanyi later extended.
Bargaining theory: The mathematical analysis of negotiations in which parties seek agreement over possible outcomes. Private information about costs or resolve changes the strategic structure of bargaining.

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Robert AumannRelated: Harsanyi’s framework for private information complements Aumann’s work on beliefs and knowledge.