Nobel Prize in Economics
Thursday, October 13th, 2005The (sort-of) Nobel Prize in Economics has been announced. The contributions of one of the two, Robert Aumann, are almost purely mathematical work in game theory.
His most interesting idea is that of correlated equilibria. The usual definition of equilibrium in a non-cooperative game, Nash equilibrium, rules out certain kinds of cooperation, even when that cooperation is in the self-interest of each player. Correlated equilibria allow randomized strategies which rely on a random event that is known to both players. Some details about correlated equilibria can be found
here.
(As an aside, the Wikipedia entry for Aumann is unusually bad, so it’s a good candidate for updating, if anyone’s interested. There’s also no entry for correlated equilibrium.)