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Mathematics Alumnus Aumann Wins Nobel Prize in Economics

By Diana Jue

When Robert Aumann PhD ’55 was told that he was one of the winners of the 2005 Nobel Prize in Economic Sciences, he was also told to suppress his most basic urge — and keep the secret for 15 minutes. When it finally became public knowledge, “there were many hugs and kisses,” he said.

Aumann, 75, who received his doctoral degree in mathematics from MIT, will share the $1.3 million prize with University of Maryland Professor Thomas C. Schelling for “enhanced our understanding of conflict and cooperation through game-theory analysis,” according to the Nobel Foundation.

Game theory is a branch of mathematics that analyzes “interaction between entities,” including “organizations, companies, and even species,” he said. Each party is out to maximize its own well-being. “It’s an underlying theory, rather than a specific application,” and can be applied not only to parlor games, but also to economics, elections, war, and international relations, he said.

Aumann’s contributions to game theory primarily involve the use of mathematical analysis to develop concepts and hypotheses. In his work on the theory of repeated games, Aumann showed that in the long-term, peaceful cooperation is sustained between parties, even when they have drastically differing interests.

John F. Nash, a former C.L.E. Moore instructor and winner of the 1994 Nobel Prize in Economics, introduced him to game theory while he was a graduate student at MIT, Aumann said.

Bengt Holmstrom, head of the Economics Department, said that Aumann “has been the main force behind the game theory revolution that has so profoundly changed academic research in economics.”

The best part about winning was hearing from old friends from as many as 60 years ago — “it’s too bad that I lost touch with these people, and here they are,” he said.

According to a news release from the Israel Ministry of Foreign Affairs, Aumann immigrated to Israel in 1956 and became an instructor at the Hebrew University, where he eventually rose to the rank of professor emeritus in 2000. He has also served as a visiting professor at many American universities, including Princeton, Yale, and Stanford. Aumann has authored nearly 100 scientific papers and six books.