Last week it received the ultimate recognition as an established and significant concept in economics. Three of game theory's top exponents were awarded the Nobel Prize in economics. They are John F. Nash of Princeton University, John C. Harsanyi of the University of California at Berkeley and Reinhard Selten of the University of Bonn in Germany. The award illustrates how long it sometimes takes for the Nobel committee to catch up with trends and ideas in certain disciplines. The economics prize was established only in 1968, a quarter-century after game theory was elaborated in modern times.
Game theory is both easy and excruciatingly difficult.
People use it all the time, average people, in their daily lives. It comes into play in mundane deals like buying a car, where a certain skill in haggling is required. The buyer's offer is usually formulated on the basis of what he or she presumes the seller will take. The seller is guided by a presumption about how high the buyer will go. It is used to describe any relationship and interaction, economic, social or political.