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The success of the film A Beautiful Mind propelled the name of schizophrenic American economist John Nash to the attention of a worldwide audience. But few people are aware that Nash shared his Nobel Prize in 1994 with a masters graduate in economics from the University of Sydney, John C. Harsanyi.

Harsanyi was born in Budapest in 1920 and fled to Australia in 1950. Of Jewish descent, he survived the last year of the war in a Nazi forced labour camp, only to find himself persecuted by the communists for his anti-Marxist views as an assistant professor of sociology at Budapest University.

After arriving in Sydney, and with only limited English, he worked in a succession of labouring jobs, later admitting that his "utter lack of manual dexterity" made these rather short-lasting.

But in the evenings he attended lectures at the University, receiving partial credit for his Hungarian qualifications, and completed the masters course in two years instead of the usual four.

He recalled in his autobiography for the Nobel Foundation: "I changed over from sociology to economics because I found the conceptual and mathematical elegance of economic theory very attractive."

Harsanyi was particularly interested in the work on game theory being carried out by John Nash, who published four papers on the subject while Harsanyi was studying at Sydney. Game theory applies the same mathematics that can be used to predict the outcome of games like poker and chess to economic and political situations.

Harsanyi's contribution to the work was to extend the theory to games and situations where players lack complete information about each other or the rules of the game. This greatly increases its usefulness in situations of political and economic conflict, and in the 1960s Harsanyi had the opportunity to put his theories into practice as an adviser to the US government on arms control negotiations.

Dr Yanis Varoufakis, a senior lecturer in the Faculty of Economics and Business, explained the impact of Harsanyi's work: "Harsanyi liberated game theory, in particular, and economics, more generally, from the accusation that its theories apply only when individuals, firms and others are acting in an environment where everything that can be known is known.

"Harsanyi changed all this by extending these theories in such a manner that they could, all of a sudden, handle considerable uncertainty concerning all sorts of parameters, such as demand levels at different prices, costs, temperament of others and so on.

"By blending probability theory with John Nash's notion of equilibrium, he gave economics an impetus that it had hitherto lacked."

Harsanyi received an MA from Sydney in 1953, writing his thesis on Inventions and Economic Growth, before moving to the US in 1956 where he became a professor at the University of California Berkeley. He returned to Sydney University in 1995 to receive an honorary doctorate in economics.

Well into the 1990s he continued to work on his theories in the US, where he was known for dazzling originality, philosophical insight and technical competence. He died in 2000.


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