John C. Harsanyi; Won Nobel for Game Theory

John C. Harsanyi, the UC Berkeley economics professor who won a 1994 Nobel Prize for his work in game theory, died of a heart attack at his Berkeley home Wednesday.

He was 80 and had been suffering from Alzheimer's disease.

Harsanyi shared the $930,000 prize with two other scholars of game theory, John F. Nash of Princeton University and Reinhard Selten of the University of Bonn.

Game theory occupies a specialized field of mathematics in which complex logic is applied to real-world scenarios of conflict and competition. By assigning numerical values to various strategies, game theory makes it possible to calculate winners and losers.

"Eventually, it will give us a higher standard of living because we make better decisions" in business and in government, Harsanyi told The Times when the prize was announced.

Derived from studies of games such as poker or chess, game theory has roots in the Cold War era. It was launched in a 1944 book, "The Theory of Games and Economic Behavior," by two Princeton economists, John von Neumann and Oskar Morgenstern.

Harsanyi's co-winner, Nash, made his greatest contribution by laying out the mathematical principles of games or rivalries in which all players have the same information.

In the 1960s, Harsanyi was an advisor to the federal government on disarmament talks with the Soviet Union. He found, however, that game theory was an imperfect tool because neither side knew much about the other. They were playing what theorists called a game of incomplete information. This was the chief weakness of Nash's work: the assumption that players have perfect knowledge of their competitors' motives and resources.

In a series of papers published in the mid- to late 1960s, Harsanyi did his most important work, developing mathematical models that showed rivals how to compete effectively without knowing their competitors' next steps. It was this contribution that the Nobel committee cited in awarding Harsanyi the prize along with Nash and Selten.

"That was a revolutionary development," UC Berkeley economist Thomas Marschak told the UC Berkeley publication California Monthly in 1994, "because it really allowed more realistic modeling in all economic situations."

Harsanyi's work broadened the theory's use because, as he explained, "in real life, people very seldom have full knowledge" about their rivals.