Background
HARSANYI, John Charles was born in 1920 in Budapest, Hungary.
HARSANYI, John Charles was born in 1920 in Budapest, Hungary.
He attended high school at the Lutheran Gymnasium in Budapest. During high school, became one of the best problem solvers of the KöMaL, the Mathematical and Physical Monthly for Secondary Schools.
Although he wanted to study mathematics and philosophy, his father sent him to France in 1939 to enroll in chemical engineering at the University of Lyon. However, because of the start of World War II, Harsanyi returned to Hungary to study pharmacology at the University of Budapest (today: Eötvös Loránd University), earning a diploma in 1944.
After the end of the war, Harsanyi returned to the University of Budapest for graduate studies in philosophy and sociology, earning his Ph.D. in both subjects in 1947.
In 1956, Harsanyi received a Rockefeller scholarship that enabled him to spend the next two years in the United States, at Stanford University and, for a semester, at the Cowles Foundation. At Stanford Harsanyi wrote a dissertation in game theory under the supervision of Kenneth Arrow, earning a second PhD in economics in 1959.
University Assistant, University Budapest, Hungary, 1947-1948. Pharmacy Manager, Budapest, 1948-1950. Factory Worker, Sydney, Australia, 1951-1953.
Lector, University Queensland, Brisbane,
1953-1956. Research Association, Cowles Foundation, Yale University, 1957. Visiting Assistant Professor, Stanford University, 1958.
Senior Fellow, American National University, 1959-1961. Professor of Economics, Wayne State University, Detroit, 1961-1963. Professor Business Administration, University California Berkeley,
1964-1983.
Visiting Professor, Universities, Bielefeld, W. Germany, 1973-1974, 1978-1979, Bonn, W. Germany, 1978, Paris XII, 1979, Sydney,1983. Flood Research Professor Business Admin, Professor of Economics, University California Berkeley, since 1983. Editorial Boards, International
J. Game Theory, J. Conflict Resolution, Mathematics Social Sciences-, Association Editor, Mathematics Operations Research.
I was attracted to economics by the elegance and the analytical power of economic theory. But I soon concluded that this power could be significantly increased by theoretical innovations based on modern decision theory and game theory. For instance, the old welfare economics, based on ordinal and interpersonally noncomparable utilities, could seldom supply clear policy recommendations.
I showed how we can use decision theory as a logical foundation for a much more powerful utilitarian welfare economics, provided that we admit interpersonal utility comparisons, for which there are compelling philosophical reasons in any case.
In positive economics, conventional theory fails to supply unique predictions for bargaining, oligopoly, and many other cases. This led me to study game-theoretical solution concepts that do supply unique predictions. Thus, I showed the equivalence of Nash’s and Zeuthen’s bargaining solu
tions.
And defined a generalised Shapley value, which was a generalisation of both the Shapley value and of the NashZeuthen solution. I also proposed game-theoretical models for political power and for social status. Then, I showed how to extend game theory itself to games with incomplete information.
This work greatly increased the use of game-theoretical models in economics, particularly in the study of bargaining, auctions, public tenders and oligopoly, as was pointed out by Reinhard Selten and myself and is now gaining increasing acceptance: noncooperative-game models, including nonco-operative bargaining models, are often much more informative than cooperative-game models. But this raises the question of how to select one specific equilibrium point of each nonco-operative game as the solution. I first proposed the ‘tracing procedure’ as a partial answer and later, jointly with Selten, proposed a ‘general theory of equilibrium-point selection’.
I have also written several papers in the philosophy of science, including one on the foundations of mathematics.