Bachelor of Arts (Mathematics), Master of Business Administration, DBA Harvard University, 1959, 1961, 1963.
Assistant Professor, University California Berkeley, 1963-1964. Assistant Professor, Association, Professor, Stanford University, 1964-1971. McBean Professor Decision Sciences, Graduate School Business, Stanford University, Stanford, California, United States of America, since 1971.
Association Editor, Econometrica. Member, Economics Panel National Science Foundation, USA, 2.
I think it is possible to reconstruct economic theory from a foundation in game theory, and indeed many contributors are advancing the task. The methodology has improved (though much remains) and it enables inclusion of realistic features: strategic behaviour, informational disparities, timing and dynamics. Capturing the effects of incentives on efficiency is primary, both in trading processes (bargaining, auctions, bid-ask markets, etc.) and in contracting and the organisation of firms.
Pricing strategy is also a candidate, especially discriminatory practices and public-utility pricing where selfselection is important, but also competitive battles (price wars, entry and exit). The fine structure of markets is poorly modelled, in my view, and the theory barely conveys the richness of practice. This would be fine if theory captured the main features but actually it misses essentials.
The challenge is more often the right formulation than the analysis. A genuine welfare economics awaits a better understanding of product and factor (especially labour) markets. The reliance of game theory on assumed common knowledge and perfect ‘rationality’ is an analytical strength and a practical deficiency.
The robustness of this approach depends mainly on showing that simple strategies suffice for the important economic institutions. Practical studies of management, and especially investment and pricing, are my best source of theoretical topics. I continue to be amazed at the estrangement of so much economic theory, and many economists, from current practice in the field they study. I intend to return to social choice theory and political science with the tools of game theory.
I see social science as modern philosophy with a realistic bent, and think it can make a difference by explicating classical conundrums. E.g., an analysis of a bargaining game sheds more light than any axiomisation. I retain an interest in risk-sharing, public enterprises, and even markets, that achieve co-operatively efficient outcomes with economies of numbers, scale, or information.
Public utility investments and pricing need considerable work. My early interest in computational topics waned as micro-seconds became cheaper. Working with doctoral students is a great pleasure.