Birthday: October 5, 1930
Died At Age: 85
Sun Sign: Libra
Also Known As: Reinhard Justus Reginald Selten
Born in: Wrocław, Poland
Famous as: Economist
Spouse/Ex-: Elisabeth Langreiner
Died on: August 23, 2016
awards: Nobel Memorial Prize in Economic Sciences
Who was Reinhard Selten?
Reinhard Selten is a German economist who won a share of the 1994 Nobel Memorial Prize in Economic Sciences. Known for his work in bounded rationality, he played a major role in the development of game theory. He also built the Laboratory for Experimental Economics (BonnEconLab) at the University of Bonn and is often referred to as one of the founding fathers of experimental economics. Born in Breslau (Wrocław) in Germany (now in Poland) in 1930, he grew up during a highly tumultuous period in European history. Partly of Jewish origin, he endured a tough childhood and teenage, living under the Hitler regime. However, unlike many of his relatives who perished in the holocaust, he was able to survive the World War II and proceeded to rebuild his life. He studied mathematics at the University of Frankfurt and worked as scientific assistant to Heinz Sauermann for a few years. Having a deep interest in game theory, he refined the important economic concept of the Nash equilibrium, which had been proposed by the prominent mathematician John Nash. Working on the concept, Selten developed the “subgame perfect equilibrium” and discussed his theory with economist John Harsanyi. The collective works of Nash, Selten, and Harsanyi won the trio the 1994 Nobel Memorial Prize in Economic Sciences.
Childhood & Early Life
Reinhard Justus Reginald Selten was born on October 5, 1930, in Breslau (Wrocław), then in Germany (now in Poland), to Adolf Selten, and Käthe Luther. His father was of Jewish origin though he personally did not belong to any religious community and his mother was a protestant. The boy was christened as a protestant due to the prevailing political circumstances in Europe which was increasingly becoming anti-Semitic.
He grew up in a politically tense environment with the World War II looming large on the horizon. Once the war started, he witnessed the destruction of the town he grew up in and the deaths of many of his relatives. To add to the family’s woes, his father became seriously ill and died in 1942.
Being a half-Jewish boy under the Hitler regime was a very difficult experience for the young teen. He was forced to leave high school when he was 14 and the chance to learn a trade was denied to him. Fortunately, he was able to leave Breslau with his mother and siblings as refugees, first going to Saxonia, then to Austria and finally to Hessia.
The family moved to Melsungen, a small town, in 1947 where he attended high school until 1951. During these years he developed a strong interest in mathematics. By this time he had also become interested in political matters.
He studied mathematics at the University of Frankfurt from 1951 to 1957 and obtained his master's degree.
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Reinhard Selten was appointed by Professor Heinz Sauermann, a professor at the University of Frankfurt, as a scientific assistant to him in 1957. Under Sauermann he performed research funded by Deutsche Forschungsgemeinschaft, the German counterpart of the National Science Foundation.
Initially he was supposed to apply decision theory to the theory of the firm but found himself becoming increasingly involved with economic laboratory experimentation instead. At that time experimental economics as a field didn’t yet exist and thus Selten became one of the founding fathers of experimental economics.
In 1959, he published a journal article in collaboration with Sauermann with the title ‘Ein Oligopolexperiment’ (an oligopoly experiment). He received his Ph.D. in mathematics in 1961 with a thesis on the evaluation of n-person games.
In the early 1960s he conducted a series of experiments on an oligopoly game with demand inertia. Over the course of his experiments he defined subgame perfectness and published a paper ‘Ein Oligopolmodell mit Nachfrageträgheit’ (An Oligopoly Model with Demand Inertia) in 1965.
In 1968, he completed his postdoctoral degree (Habilitation) in economics. From 1969 to 1972, he taught at the Free University of Berlin as a full professor of economics before moving to the University of Bielefeld in 1972.
The years at Bielefeld were highly productive for him. Taking forward his work in game theory, he defined a refined notion of perfectness—now often referred to as trembling hand perfectness—in a paper published in 1975.
In 1984, he moved to the University of Bonn, as a professor of economics and built the BonnEconLab, a laboratory for experimental economic research. He became professor emeritus and scientific coordinator in 1996. He is also a member and co-founder of the International Academy of Sciences San Marino.
Reinhard Selten is an expert in the field of game theory and is credited to have introduced his solution concept of subgame perfect equilibrium, which further refined the Nash equilibrium. He also gave the trembling hand perfect equilibrium, which is also a refinement of Nash equilibrium.
He is one of the central figures in the foundation of experimental economics, which is the application of experimental methods to study economic questions. This field of study uses experiments to help understand how and why markets and other exchange systems function as they do. It also includes understanding institutions and the law (experimental law and economics).
Awards & Achievements
Reinhard Selten, John C. Harsanyi, and John F. Nash Jr. were jointly awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 1994 "for their pioneering analysis of equilibria in the theory of non-cooperative games."
Personal Life & Legacy
He married Elisabeth Langreiner in 1959. They do not have any children.