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Austrian Economics and Game Theory: a Stocktaking and an Evaluation

Tags Austrian Economics OverviewOther Schools of Thought

06/16/1999Nicolai J. Foss

Foss discusses the merits and drawbacks of game theory in economics from the perspective of Austrian economics. He begins by arguing that Austrians have neglected game theory at their peril, and then suggest that game theoretic reasoning could be one way of modelling key Austrian insights. However, admittedly some aspects of game theory don’t square easily with Austrian economics. Moreover, a major stumbling block for an Austrian acceptance of game theory may lie in the traditional Austrian resistance to formal methods.

Author:

Nicolai J. Foss

Nicolai J Foss is the Rodolfo Debenedetti Chair of Entrepreneurship at the Bocconi University, Milano.