The need to study war for peace

Twenty years on, the 2005 economics Nobel-winning duo Schelling and Aumann’s work offers several lessons to understand today’s conflict-ridden world

- AMOL AGRAWAL

2025 MARKS 20 years of the Nobel economics prize awarded to the duo of Thomas Schelling and Robert Aumann “for having enhanced our understanding of conflict and cooperation through game-theoryanalysis” The relevance of the 2005 award cannot be emphasised enough given that the world is ridden with multipleconflicts and is dangerously morphing into a pervasive war zone.

Economics isa study of human behaviour where humans react to not just incentives but also each other’s behaviour.Game theory isa field which studies this interpersonal human behaviour.The early history of game theory shows its roots in probability and card games. The modern history of game theory starts in 1928 when mathematician John Von Neumann wrote an article on how players minimise their losses. In 1944, von Neumann co-wrote the book, Theory of Games and Economic Behavior,with economist Oskar Morgenstern. It is quite a story of how the duo from two different fields met and created the field of game theory. They introduced many types of games in their book. In cooperative games, players form binding agreements whereas players of non-cooperative games act in their self-interest. In zero-sum games players’ gains and losses are offset with each otherwhereas in non-zerosum games there could be profits or losses. In perfect information games, all players have all the information whereas in imperfect games, information is hidden.