Reinhard Justus Reginald Selten (5 October 1930 – 23 August 2016) is a German economist, who won the 1994 Nobel Memorial Prize in Economic Sciences (shared with John Harsanyi and John Forbes Nash). He is also well known for his work in bounded rationality, and can be considered as one of the founding fathers of experimental economics.
Models of bounded rationality describe how a judgement or decision is reached (that is, the heuristic processes or proximal mechanisms) rather than merely the outcome of the decision, and they describe the class of environments in which these heuristics will succeed or fail.
I was always skeptical about authority, about things which were told by authorities, because I was living in a country and in a time where the authority was utterly wrong, in my view. And therefore I distrusted, I feared authority, I also fear it today. I am in a very, very fearful, I mean maybe more than other people, but I distrust authority. That makes me more independent and also some part of rebellious,... I’m a maverick.
Reinhard Selten (2004), as cited in: Klein, Daniel B., Ryan Daza, and Hannah Mead. "Reinhard Selten (Ideological Profiles of the Economics Laureates)." Econ Journal Watch 10.3 (2013): 601-604.
Reinhard Selten (1994) "Reinhard Selten - Biographical". on Nobelprize.org. Nobel Media AB 2013. Web. 13 Jun 2014.
My first contact with game theory was a popular article in Fortune Magazine which I read in my last high school year. I was immediately attracted to the subject matter and when I studied mathematics I found the fundamental book by von Neumann and Morgenstern in the library and studied it.
My master's thesis and later my Ph.D. thesis had the aim of axiomatizing a value for e-person games in extensive form. This work made me familiar with the extensive form, in a time when very little work on extensive games was done. This enabled me to see the perfectness problem earlier than others and to write the contributions for which I am now honored by the prize in memory of Alfred Nobel.
Around 1958, I became aware of H.A. Simon's seminal papers on bounded rationality and was immediately convinced by his arguments. I tried to construct a theory of boundedly rational multigoal decision making. Together with Heinz Sauermann, I worked out an "aspiration adaptation theory of the firm" which was published as a journal article in 1962... More and more I came to the conclusion that purely speculative approaches like that of our paper of 1962 are of limited value. The structure of boundedly rational economic behavior cannot be invented in the armchair, it must be explored experimentally.
In 1965, I was invited to a game theory workshop at Jerusalem which lasted for three weeks and had only 17 participants, but among them all the important researchers in game theory, with few exceptions. Game theory was still a small field. We had heated discussions about Harsanyi's new theory of games with incomplete information. This was the beginning of my long cooperation with John C. Harsanyi.
One problem with various Nash equilibria is that they are not always unique. Selten applied stronger conditions to reduce the number of possible equilibria and to eliminate equilibria that are unreasonable economically. In 1965 he introduced the concept of “subgame perfection,” his term for this winnowing down of possible equilibria. “At that time I did not suspect that it often would be quoted, almost exclusively for the definition of subgame perfectness,” Selten wrote in his Nobel autobiography.
"Reinhard Selten," The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty. 13 June 2014.
Reinhard Selten (Ideological Profiles of the Economics Laureates). by Daniel B. Klein, Ryan Daza, and Hannah Mead. in: Econ Journal Watch 10.3 (2013): 601-604.
This page was last edited on 28 September 2016, at 13:24.