Best known for his contributions to the study of game theory and its application to economics, Hungarian-American Nobel Prize laureate “Martian” scientist János Harsányi was born one hundred years ago.
Harsányi was born in Budapest, Hungary, on May 29, 1920. He went to the Lutheran Gymnasium in Budapest, one of the best schools in Hungary, with alumni like János Neumann and Jenő Wigner. His parents owned a pharmacy in Budapest, giving them a comfortable living. That is why he started pharmacy studies in 1937, although he preferred philosophy and mathematics. He also chose pharmacy because Hitler was in power in Germany with his influence growing in Hungary, and this way Harsányi could escape conscription into the Hungarian Army, which as somebody of Jewish descent, would have meant forced labor.
The term 'Martian' refers to a group of prominent Hungarian scientists who emigrated to the U.S in the first half of the 20th century. These scientists were seemingly superhuman in intellect, spoke an incomprehensible native language, spoke English with a strong accent, and came from a small obscure country. This led to them being called Martians, a name they jocularly adopted. The term was reportedly first used by physicist Leó Szilárd.
However, in 1944 after the seizure of power by the Arrow Cross Party he was forced to change his plans and was compelled to join a forced labor unit on the Eastern Front. After seven months, the German authorities decided to deport his unit to a concentration camp in Austria. He, however managed to escape at the railway station just before his train left and found refuge in the cellar of a monastery of a Jesuit father he had previously known.
After the World War, he re-enrolled at the University of Budapest (Eötvös Lóránd University) where he completed a Ph.D in philosophy in 1947. The academic year 1947–1948 he spent on the faculty of the Institute of Sociology of the University of Budapest, where he met Anne Klauber, his future wife. He was forced to resign the faculty because of openly expressing his anti-Marxist opinions, while Anne faced increasing pressure to leave him for the same reason.
They decided to remain in Hungary for the following two years attempting to sell the family’s pharmacy. After realizing that the communist party would confiscate it in 1950, they fled by illegally crossing the border into Austria and then on to Australia where her parents had some friends. The couple eventually married there in 1951. As his English wasn’t good and his Hungarian university degrees weren’t recognized in Australia, in their first three years there he had to do factory work.
Parallelly, he studied economics in the evenings at the University of Sydney and obtained an M.A. degree in 1953. While studying in Sydney, he also started publishing research papers in important journals.
In 1954, he was appointed Lecturer in Economics at the University of Queensland in Brisbane, and in 1956, he was awarded a Rockefeller Fellowship and spent two years at Stanford University. There, he wrote a dissertation in game theory under the supervision of Kenneth Arrow, earning a second Ph.D in economics in 1959. Harsányi’s student visa expired in 1958 and the couple returned to Australia.
After working for a short time as a researcher at the Australian National University in Canberra, Harsányi began to feel isolated because at that time game theory was virtually unknown in Australia. With the help of Kenneth Arrow and James Tobin (both of whom later received Nobel prizes), he was able to move to the United States, taking a position as professor of economics at Wayne State University in Detroit between 1961 and 1963. In 1964, he moved to the University of California in Berkeley, California, where he remained until retiring in 1990. And this was also where, shortly after their arrival, his son Tom, now a history professor at Harvard, was born.
Harsányi is best known for his contributions to the study of game theory, specifically for developing the highly innovative analysis of games of incomplete information, so-called Bayesian games. He also made important contributions to the use of game theory and economic reasoning in political and moral philosophy (specifically utilitarian ethics), as well as contributing to the study of equilibrium selection.
In 1994, alongside John Nash and Reinhard Selten, received the Nobel Memorial Prize in Economic Sciences “for their pioneering analysis of equilibria in the theory of non-cooperative games.” The work for which he won the Prize in economics was a series of articles published in 1967 and 1968 which established what has become the standard framework for analyzing “games of incomplete information,” situations in which the various strategic decision-makers have different information about the parameters of the game. He resolved the problem of how players could make decisions while not knowing what the other knows by modelling the situation with initial moves by Nature, using known probabilities to choose the parameters, with some players observing Nature’s move but other players just knowing the probabilities and the fact that some players have observed the actual realized values. This relies on assuming that all players know the structure of the game, which means they all have “common priors,” knowing the probabilities Nature uses in selecting parameter values, an assumption known as the Harsányi Doctrine.
In addition, from 1966 to 1968, Harsányi was part of a team of game theorists tasked with advising the United States Arms Control and Disarmament Agency in collaboration with Mathematica, a consulting group from Princeton University led by Harold Kuhn and Oskar Morgenstern.
Harsányi died on August 9, 2000, from a heart attack after he suffered from Alzheimer’s disease.
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