The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1994
John C. Harsanyi, John F. Nash Jr., Reinhard Selten
Transcript from an interview with Professor Reinhard Selten at the 1st Meeting of Laureates in Economic Sciences in Lindau, Germany, September 1-4, 2004. Interviewer is freelance journalist Marika Griehsel.
Professor Selten, very welcome to this interview here in Lindau. My very first question would really be about the day ten years back when the telephone rang and you were told that you were to be given the Economy Prize in Memory of Alfred Nobel, and you were to share it with Nash and Harsanyi. How did you react, what did you feel?
Reinhard Selten: There was no telephone ringing. I was in the supermarket with my wife and we were shopping. So nobody was at home when the telephone was ringing. And usually you are called before it, but that since there was, since we were away so long, they then announced it, even if I was not yet knowing it.
So you didn't know it?
Reinhard Selten: Didn't know it, but it was already announced. So when I came home then, there are ... a lot of people before my house and I thought: What happened? Maybe something bad happened here? Somebody broke in or something like that? Now people are collecting there for some reason, I didn't know what. And I stopped the car and I went out of the car and somebody came to me and said "I congratulate you". Gave hand. "Congratulations", I said, "for what? So will you explain to me?"
What did you think then? Did you think it was hoax?
Reinhard Selten: No, I said to him "Yes, I have to get out first my wife from the car and the wheelchair, to bring my things in", and I opened the door and then everybody is there, all journalists invading my house and so on. And it was so hectic that I didn't have much time to think about it at all, not, I was just trying to cope with this situation.
Then the telephone was always ringing and all this and so ... I didn't really believe it, not at first. Not that it was a hoax, but I knew that it was true, but you don't get emotionally adjusted to it immediately, no. You see that it is reported in television, but it has all an unreal flavour which for me something I couldn't get really adjusted to. Took some time. And I only got adjusted to it when we went in Stockholm to the City Hall where there was this ...
The big banquet?
Reinhard Selten: Yes, but actually the moment when we came near by car to the City Hall, then I began to feel that this is real ... It's the banquet and all of. But before, I mean, of course I knew that this had happened, I mean, it was intellectually clear, but it was not emotionally accepted still, no.
Has it affected your life in a way that you at times maybe would even regret taking a lot of time away from your research?
Reinhard Selten: Yes, it is a little like this because my presence is respected at many locations and I have to travel more than I would like, because, well, sometimes you like to do it, but in many cases you do it in order not to disappoint some people whom you think you should not disappoint and so, not that it is not good, you know, but I have difficulty to do my work no? I really get under pressure also at home.
What was it in the game theory that really fascinated you? I'm not sure, I just want to make a simple assumption here, that when you deal with game theory you're really looking into predicting human actions?
Reinhard Selten: No, this was not ... well, maybe predicting human actions is also a goal of game theory, but it is more the question what would rational players do in a game? Maybe players are not always rational. I mean, we know now that they are far from rational very often; I mean they are still boundedly rational, but not really rational. But nevertheless it is an important problem to think about what rational players would do in the game, how would they interact, yes? I mean, to have the game theory concerned with the definition of rationality. Regardless of whether people follow rationality or not you have to know what it is, yes?
And that was the real question of rational game theory. It had to be pursued even if I had ... I mean I had done early experimental work and I knew that game theory would not ... I mean, sometimes would be predictive certain, other cases it would not predict correctly human behaviour, you wouldn't expect it. It always predicts human behaviour, but it was for a long time I was adhering to the idea of bounded rationality, I was convinced ... ever since I have read the work of Herbert Simon in the late 50's I was convinced about the idea of bounded rationality, but nevertheless I felt very much compelled to explore the definition of rationality in game situations. Was very important question because it's not really clear what rationality should be in such interactive situations.
It seems that it continued to fascinate you over a number of years because you have, which I found very interesting, worked with a lot of researchers, scientists from other academic disciplines. What made you want to do that?
Reinhard Selten: I was always fascinated by the idea to do something about the real world, about science, about applications to the real world, but I wanted to rely on the expertise of people in the fields. So I worked together very successfully with the political scientist who was a real expert on the Middle East, Amos Perlmutter, and then I worked also very well with Avi Shmida, who is a biologist. Then also this fascinated us by new ideas and concepts, I mean this biological game field fascinated me also and I came into contact with it and this was ...
How far can one take it? You had also looked into, for example, creating a game theory around, for example, real conflicts, international conflicts, which I found very, very interesting.
Reinhard Selten: I did several types of work about several investigations of application of game theory to international relations. And this one thing which is of special importance I think, is the scenario bundle method which I developed together with Amos Perlmutter and that was, I think, quite interesting for you. I mean for a long time I didn't do anything about it but just recently I did something together with the Security Office of the Austrian Defence Ministry, Mr Reiter, he had made a study of the Kosovo conflict and a book was published about this though this is still ...
Would you please mention the title of the book, I think that could be very interesting if you remember?
Reinhard Selten: It was something like Zur Lösung des Kosovo-Konfliktes*, it's a German book.
Can one apply your theories on Germany today to look into the future or the different ways of, I mean, for example, a lot of Western countries today are dealing with problems of a slow economic growth, we have aging populations, we have less jobs available?
Reinhard Selten: We could look, I mean in all that we see lots of problems are and you have to go to economic data and this is not the problem of game theory, that is the problem of usual economic analysis which can do a lot about it. It has been done work on this. But what you could do, you could make a strategic analysis, even apply the scenario bundle method to the internal policy, to the parties, the political forces in Germany.
For example you ask the question what will happen in politics, not so much what will happen in 10, 20 years in political reforms, but whether the reforms will come about at all and you know what will be the consequences of the loss which are now made and so on. But it is difficult to make good predictions about this, because there is one weak point in all this. This was also in our earlier efforts and this is that political mass movements are difficult to predict. So our first implication of this was done to the Persian Gulf and this was in '76, and then my experts at that time all said that a revolution in Iran is very implausible, very unlikely, will not happen and they had also good reasons for that. And it then happened.
Then Khomeini came to power very surprisingly and not only my experts but all secret services, everybody was really surprised. I mean, if some people said afterwards say they have known this before it's just a hindsight by us. I mean you always find people who have known everything before allegedly but I don't think so. I mean nobody expected such things and there are unexpected consequences, mass movements which you don't predict.
Already at an early age the course of your childhood and the difficulties that your Jewish background created growing up in Germany you were deprived of opportunities and that it was hard at times but you have said in your biography that it made you act and think independently as well. Which way has that shaped you, do you think, if you would like to elaborate?
Reinhard Selten: I was always sceptical about authority, about things which were told by authorities, because I was living in a country and in a time where the authority was utterly wrong, in my view. And therefore I distrusted, I feared authority, I also fear it today. I am in a very, very fearful, I mean maybe more than other people, but I distrust authority. That makes me more independent and also some part of rebellious, I mean what ... once said in ... about me that I am a maverick, I'm a maverick.
Because also in science I took always some points of view which were somewhat oppositional. And I found the force to present oppositional views, to keep them. I was not feeling the pressure to conform to the general view about certain things. It was in science and it's important to have an independent mind, to be able to follow your own ideas.
Is it important to have a strong family, a wife who also stands behind you or with you during times of opposition or criticism? Has that been for you in that way?
Reinhard Selten: Yes, my wife was important, also when we were young she was helping me, even in my scientific work she was helping me and so that was important. But she never pushed me to do this or that, you know what I mean? It's not like that. I was pushed because I was always delivered from this ..., science was for me like a drug. I am addicted to research, let's say.
I would like to just move on a little bit, as I know that I would very much like students who are listening to this interview to get advice from you, what field should they get into? If they really want to keep this in the future?
Reinhard Selten: I mean they should ... I don't want to give too specific advice, but it depends also on their character. I mean, if they want to have a sure and long career, then they should stay in the mainstream and try to be very quick and to do something and get their job. But if they're more willing to take a little more risk they should enter a very young field and grow with it rather than to enter into an older field to learn a lot in this older field, to make a lot of investment and then go there with the mainstream.
What would such a young field be?
Reinhard Selten: For example bounded rationality is still very young, because there's very much which we don't know. I mean it's very difficult. Usually these young things are very difficult and then people always say "Oh, what can you do?" I mean, we don't know what we can do here. But that's actually the challenge, that you don't know how to attack the problems. And these are the worthwhile problems where there is still everything is confused and you don't know how to attack it and how to yes?
Do you see there is room financially for this kind of research today?
Reinhard Selten: Ah, there is room for this because if there's made progress actually attention is paid to it also by people who do not want to go in this direction. I also learnt the risk of often oppositional point of view is not as big as people think. I mean if you take an oppositional point of view, people look at it with interest even if they don't accept it completely. They may say "Oh, that's original". Of course you have to present it in the right way, but the scientific world is not the enemy of young imaginative people.
If somebody is young and brilliant and imaginative he will be listened to even if he is a little unorthodox. It will not prevent him to get ahead, I think. So somebody who is young has to know what he wants to do also. I mean, nobody should enter a field if he is not attracted to it, he has to have a real feel, a real attraction to it so that he can be kept captivated by the questions there. Because you have to get emotionally involved in these questions, you have to become a drug addict for this kind of scientific activity, because if you just want to do it in order to get a career it's already wrong. I mean, people ask me what do you have to do in order to get the Bank of Sweden Prize? Then I say if you ask this you already on the wrong track.
That's a great note to end this interview on. Thank you very much Professor, it was great to speak to you and I really enjoyed it and I've been listening to your advice although I'm not in the academic field myself! Thank you.
* Toward a Resolution of the Kosovo Conflict
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