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Oskar Morgenstern (January 24, 1902 – July 26, 1977) was an economist. In collaboration with mathematician John von Neumann, he founded the mathematical field of game theory and its application to economics (see von Neumann–Morgenstern utility theorem).^{ [1] }^{ [2] }
Companies he served as founder/co-founder of included Market Research Corporation of America, Mathematica and Mathematica Policy Research Inc.
Morgenstern was born in Görlitz, Germany. His mother was said to be a daughter of Emperor Frederick III of Germany.^{ [3] }^{ [4] }^{ [5] }^{ [6] }^{ [7] }
Morgenstern grew up in Vienna, Austria, where he also went to university. In 1925, he graduated from the University of Vienna and got his PhD in political science. From 1925 until 1928, he went on a three-year fellowship financed by the Rockefeller Foundation. After his return in 1928, he became a professor in economics at the University of Vienna until his visit to Princeton University in 1938. In 1935, Morgenstern published the article Perfect Foresight and Economic Equilibrium, after which his colleague Eduard Čech pointed him to an article of John von Neumann, Zur Theorie der Gesellschaftsspiele (1928).
During Morgenstern's visit to Princeton University, Adolf Hitler took over Vienna through the Anschluss Österreichs and Morgenstern decided to remain in the United States. He became a member of the faculty at Princeton but gravitated toward the Institute for Advanced Study. There, he met von Neumann and they collaborated to write Theory of Games and Economic Behavior , published in 1944, which is recognized as the first book on game theory. Game theory is a mathematical framework for the study of strategic structures which govern rational decision-making in certain economic, political and military situations. In 2013, the University of Vienna relocated the Faculty of Business, Economics and Statistics and named the square Oskar-Morgenstern-Platz in his honor.
The collaboration between economist Morgenstern and mathematician von Neumann led to the birth of entirely new areas of investigation in both mathematics and economics. These have attracted widespread academic and practical interest since that time. In 1944, Morgenstern also became a United States citizen, and four years later he married Dorothy Young, with whom he had two children, Carl and Karen. In 1950, he was elected as a Fellow of the American Statistical Association.^{ [8] } Morgenstern remained at Princeton as a professor of economics until his retirement in 1970, at which time he joined the faculty of New York University. Morgenstern wrote many other articles and books, including On the Accuracy of Economic Observations, and Predictability of Stock Market Prices with subsequent Nobel laureate Clive Granger.
Morgenstern died in Princeton, New Jersey in 1977. The archive of his published works and unpublished documents is held at Duke University.^{ [9] }
In November 2012 a place in the 9th district of Vienna, Austria was called "Oskar-Morgenstern-Platz"; it is the address of the Faculties of Economics and of Mathematics of the University of Vienna.
In the late 1950s^{ [10] }^{ [11] } "Oskar Morgenstern and several of his Princeton University colleagues" began a "small research organization."
Company names with which he, along with others, were involved^{ [12] } as founders/co-founders included:
The Austrian School is a heterodox school of economic thought that is based on methodological individualism—the concept that social phenomena result exclusively from the motivations and actions of individuals.
Bayesian probability is an interpretation of the concept of probability, in which, instead of frequency or propensity of some phenomenon, probability is interpreted as reasonable expectation representing a state of knowledge or as quantification of a personal belief.
Game theory is the study of mathematical models of strategic interaction among rational decision-makers. It has applications in all fields of social science, as well as in logic, systems science and computer science. Originally, it addressed zero-sum games, in which each participant's gains or losses are exactly balanced by those of the other participants. Today, game theory applies to a wide range of behavioral relations, and is now an umbrella term for the science of logical decision making in humans, animals, and computers.
John von Neumann was a Hungarian-American mathematician, physicist, computer scientist, engineer and polymath. Von Neumann was generally regarded as the foremost mathematician of his time and said to be "the last representative of the great mathematicians"; who integrated both pure and applied sciences.
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Sir Clive William John Granger was a British econometrician known for his contributions to non-linear time series. He taught in Britain, at the University of Nottingham and in the United States, at the University of California, San Diego. In 2003, Granger was awarded the Nobel Memorial Prize in Economic Sciences, in recognition of the contributions that he and his co-winner, Robert F. Engle, had made to the analysis of time series data. This work fundamentally changed the way in which economists analyse financial and macroeconomic data. Sir Clive Granger often refers to his time at HPH Claymore which he claims to be one of his main sources of inspiration, knowledge and bravery.
Theory of Games and Economic Behavior, published in 1944 by Princeton University Press, is a book by mathematician John von Neumann and economist Oskar Morgenstern which is considered the groundbreaking text that created the interdisciplinary research field of game theory. In the introduction of its 60th anniversary commemorative edition from the Princeton University Press, the book is described as "the classic work upon which modern-day game theory is based."
In economics, game theory, and decision theory, the expected utility hypothesis—concerning people's preferences with regard to choices that have uncertain outcomes (gambles)—states that the subjective value associated with an individual's gamble is the statistical expectation of that individual's valuations of the outcomes of that gamble, where these valuations may differ from the dollar value of those outcomes. The introduction of St. Petersburg Paradox by Daniel Bernoulli in 1738 is considered the beginnings of the hypothesis. This hypothesis has proven useful to explain some popular choices that seem to contradict the expected value criterion, such as occur in the contexts of gambling and insurance.
In decision theory, subjective expected utility is the attractiveness of an economic opportunity as perceived by a decision-maker in the presence of risk. Characterizing the behavior of decision-makers as using subjective expected utility was promoted and axiomatized by L. J. Savage in 1954 following previous work by Ramsey and von Neumann. The theory of subjective expected utility combines two subjective concepts: first, a personal utility function, and second a personal probability distribution.
Lloyd Stowell Shapley was an American mathematician and Nobel Prize-winning economist. He contributed to the fields of mathematical economics and especially game theory. Shapley is generally considered one of the most important contributors to the development of game theory since the work of von Neumann and Morgenstern. With Alvin E. Roth, Shapley won the 2012 Nobel Memorial Prize in Economic Sciences "for the theory of stable allocations and the practice of market design."
David Gale was an American mathematician and economist. He was a professor emeritus at the University of California, Berkeley, affiliated with the departments of mathematics, economics, and industrial engineering and operations research. He has contributed to the fields of mathematical economics, game theory, and convex analysis.
Leonid "Leo" Hurwicz was a Polish-American economist and mathematician, known for his work in game theory and mechanism design. He originated the concept of incentive compatibility, and showed how desired outcomes can be achieved by using incentive compatible mechanism design. Hurwicz shared the 2007 Nobel Memorial Prize in Economic Sciences for his seminal work on mechanism design. Hurwicz was one of the oldest Nobel Laureates, having received the prize at the age of 90.
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Ehud Kalai is a prominent Israeli American game theorist and mathematical economist known for his contributions to the field of game theory and its interface with economics, social choice, computer science and operations research. He was the James J. O’Connor Distinguished Professor of Decision and Game Sciences at Northwestern University, 1975-2017, and currently is a Professor Emeritus of Managerial Economics and Decision Sciences.
Gerald L. Thompson was the IBM Professor of Systems and Operations Research (Emeritus) in the Tepper School of Business of Carnegie Mellon University.
Mathematica was founded by Princeton University professors in 1969 and had a multi-faceted history.
The Princeton University Department of Mathematics is an academic department at Princeton University. Founded in 1760, the department has trained some of the world's most renowned and internationally recognized scholars of mathematics. Notable individuals affiliated with the department include John Nash, former faculty member and winner of the 1994 Nobel Memorial Prize in Economic Sciences; Alan Turing, who received his doctorate from the department; and Albert Einstein who frequently gave lectures at Princeton and had an office in the building.
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