Chess and Economics

[Chris Rice]

There is a Nobel Prize feed at LinkedIn and I was quite intrigued to see the following today which was triggered by International Chess Day:

"What does chess have to do with economics? The answer is game theory.

In these games like chess, players must think ahead and devise a strategy based on expected countermoves from other players.

These interactions characterise many economic situations. Game theory is a theoretical framework that tries to produce the most optimal decision-making of competing actors in a strategic setting.

When describing the economic theory, Reinhard Selten told the New York Times that the theory was like chess: “You may not always be right, but such thinking probably makes you play better and keeps you from making as many dumb moves.”

The foundations for using game theory in economics were introduced in a monumental study by John von Neumann and Oskar Morgenstern entitled 'Theory of Games and Economic Behavior' (1944). Fifty years later, Selten, John Harsanyi and John Nash were awarded the prize in economic sciences for their contributions to the field."

There is a further link to the Nobel Prize awarded to Nash, Harsanyi and Selten for their pioneering analysis in the theory of non-cooperative games in a press release from the Academy in 1994 where there are a couple of references to chess forming the base of game theory. Personally, I enjoy teaching chess in schools, not to necessarily produce great chess players, but to teach them through chess such things as planning, strategy, taking responsibility for their own decisions etc which I know from parental and form teacher feedback has helped them in other aspects of their education. There are a number of chess problems you can set children which involve mathematics but the economics angle is one I hadn't given much thought to, but I will now.

[IM Jack Rudd]

Game theory, as I understand it, isn't particularly applicable to chess, a game of perfect information. It's much more suited to games of asymmetric imperfect information such as poker or Diplomacy.

[Nigel White]

Game theory, as I understand it, isn't particularly applicable to chess, a game of perfect information. It's much more suited to games of asymmetric imperfect information such as poker or Diplomacy.

I agree - many introductory descriptions of mathematical game theory give chess an an example of a game to which game theory does not apply.

[Chris Goodall]

Unless you're playing 1 minute and you win a rook with the old 1.e4 g6 2.d4 Bg7 3.Bh6.

[Matt Mackenzie]

I thought that was a staple of (going to the other time extreme) correspondence chess?

(due to somewhat unwise "conditionals" being stipulated)

[Tim Spanton]

I presume what is meant, with conditionals, is 1.d4 g6 2.Bh6 Bg7 3.Bxg7, winning a bishop and rook?

[IM Jack Rudd]

It's both, yes. Overly broad conditionals in correspondence chess, and pre-moves in bullet chess.