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“An Altogether Different Angle”

John Von Neumann and Oskar Morgenstern propound behavioral economics in 1944. They meet with some resistance. Gains are slow.

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Posted in 2007-08 Financial Crisis, History of economics Tagged with: , , , , , , ,

It is not often that a book’s reception warrants front-page coverage in The New York Times, but this one did, in October 1946, some eighteen months after Oskar Morgenstern joined with John von Neumann to publish Theory of Games and Economic Behavior. The new approach, explained reporter Will Lissner, “has caused a sensation among professional economists.” A 29-year-old acolyte of the new approach named Leo Hurwicz told Lissner that game theory held out the hope of “revamping and enriching  in realism a good deal of economic theory” – not overnight, but eventually. The authors had fled Hitler before the war.