US

Nash Equilibrium

Behavior in many complex and seemingly intractable strategic settings can be understood more clearly by working out what each party in the game will choose to do if they realize that the other parties will be solving the same problem. This insight has helped us understand behavior as diverse as military conflicts, price setting by competing firms and penalty kicking in soccer.

Responses weighted by each expert's confidence

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Strongly Agree
10
Bio/Vote History
Alesina
Alberto Alesina
Harvard Did Not Answer Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
8
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Agree
7
Bio/Vote History
Autor
David Autor
MIT
Strongly Agree
8
Bio/Vote History
Many ambiguous predictions, but broad insights of game theory are relevant to infinite # of domains.
Baicker
Katherine Baicker
University of Chicago
Strongly Agree
4
Bio/Vote History
Banerjee
Abhijit Banerjee
MIT
Strongly Agree
8
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Strongly Agree
7
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Agree
8
Bio/Vote History
Individuals are only boundedly rational, as the famous Keynes' Beauty Contest Experiments shows. Nevertheless strategic thinking improves.
Chetty
Raj Chetty
Harvard
Strongly Agree
8
Bio/Vote History
Chevalier
Judith Chevalier
Yale
Strongly Agree
10
Bio/Vote History
Cutler
David Cutler
Harvard
Strongly Agree
10
Bio/Vote History
Deaton
Angus Deaton
Princeton
Strongly Agree
10
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Strongly Agree
9
Bio/Vote History
This conclusion is supported by 65 years of research and many significant concrete applications. Of course, any theory is imperfect.
Edlin
Aaron Edlin
Berkeley
Strongly Agree
8
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Agree
5
Bio/Vote History
Einav
Liran Einav
Stanford
Strongly Agree
9
Bio/Vote History
Fair
Ray Fair
Yale
Strongly Agree
10
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT
Strongly Agree
7
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Agree
6
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Agree
1
Bio/Vote History
You know this and you know that I know that you know this.
Greenstone
Michael Greenstone
University of Chicago
Strongly Agree
9
Bio/Vote History
Hall
Robert Hall
Stanford
Agree
5
Bio/Vote History
Just being aware that others are solving similar problems doesn't lead to the successes economists have had. Rather it is Nash equilibrium.
Hart
Oliver Hart
Harvard
Strongly Agree
10
Bio/Vote History
Nash equilibrium is enormously useful. But people can be less rational than the theory supposes and so the predictions may be misleading.
Holmström
Bengt Holmström
MIT
Strongly Agree
7
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Strongly Agree
10
Bio/Vote History
Thank you, John Nash!
Hoynes
Hilary Hoynes
Berkeley
Agree
9
Bio/Vote History
Judd
Kenneth Judd
Stanford
Strongly Agree
8
Bio/Vote History
Kaplan
Steven Kaplan
Chicago Booth
Strongly Agree
9
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Agree
7
Bio/Vote History
Nash created a whole new way to look at many problems, not always perfect, but a great starting point and benchmark
Klenow
Pete Klenow
Stanford
Strongly Agree
10
Bio/Vote History
Levin
Jonathan Levin
Stanford
Strongly Agree
10
Bio/Vote History
Maskin
Eric Maskin
Harvard
Strongly Agree
9
Bio/Vote History
Nordhaus
William Nordhaus
Yale Did Not Answer Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Agree
5
Bio/Vote History
Samuelson
Larry Samuelson
Yale
Strongly Agree
8
Bio/Vote History
But one must be careful not to apply such equilibrium analysis in setting where it is not warranted.
Scheinkman
José Scheinkman
Columbia University Did Not Answer Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Strongly Agree
8
Bio/Vote History
Even a confirmed behavioralist has to admit that this analysis is often informative, if not always definitive.
Shapiro
Carl Shapiro
Berkeley
Strongly Agree
9
Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Strongly Agree
8
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
Agree
4
Bio/Vote History
As with much of rational choice theory, Nash equilibrium defines a benchmark to which behavior can be compared. No theory, no anomalies.
Udry
Christopher Udry
Northwestern
Strongly Agree
7
Bio/Vote History
As with any tool, game theory can be misused. But it can provide surprising and useful insights.
-see background information here