John Nash, RIP
The famous game theorist John Nash and his wife Alicia were killed in a traffic accident yesterday in New Jersey. He was 86.
I met him and had lunch with him when he came to speak at the Naval Postgraduate School in Monterey a few years ago.
The movie about him, A Beautiful Mind, is very misleading, but Sylvia Nasar’s book by the same title seems highly accurate.
Here’s his bio in The Concise Encyclopedia of Economics.
An excerpt from that bio:
A simple example of a Nash equilibrium is the prisoners’ dilemma. Another example is the location problem. Imagine that Budweiser and Miller are trying to decide where to place their beer stands on a beach that is perfectly straight. Assume also that sunbathers are located an equal distance from each other and that they want to minimize the distance they walk to get a beer. Where, then, should Bud locate if Miller has not yet chosen its location? If Bud locates one-quarter of the way along the beach, then Miller can locate next to Bud and have three-quarters of the market. Bud knows this and thus concludes that the best location is right in the middle of the beach. Miller locates just slightly to one side or the other. Neither Bud nor Miller can improve its position by choosing an alternate location. This is a Nash equilibrium.
HT to Michael Munger.