Congratulations to both! I have to say that Bob Wilson is one of my personal stars, both extremely relevant empirically and highly mathematical when appropriate. https://twitter.com/nobelprize/status/1315589975002550272

Kreps and Wilson introduced in 1982 the notion of “sequential equilibrium”, a way to select between different Nash equilibria in a game with sequential moves. 1/15

this is a hugely important notion taught in all grad schools
https://en.wikipedia.org/wiki/Sequential_equilibrium

one limitation is that in some games, sequential equilibrium doesn’t give the desired result. moreover, applied to two distinct representations of the same strategic interaction, sequential can give different answers …. that’s frustrating. 2/15

in a paper published 1986, Elon Kohlberg and Jean-François Mertens introduced the notion of “stable equilibrium”, which should include sequential equilibria, and also not depend on the particular representation that one uses of a certain game. 3/15

http://www.dklevine.com/archive/refs4445.pdf

the Kohlberg Mertens is a real beauty. it starts by asking “what are good equilibria”, what are properties that one would find desirable for such a notion? it is thus an axiomatic paper, very much in the spirit of decision theory, for instance Savage’s work. 4/15

the two pillars they request for a good concept are those stated above. contain sequential equilibria. and do not depend on the representation of the strategic interaction (invariance) 5/15

the Kohlberg Mertens paper is accessible. (relatively) easy to read and really illuminating. one important result is that one can’t satisfy the desired properties with a “point solution concept”. 6/15

this means one can’t simply take a game and say “this is THE outcome predicted in the game”. there are necessarily games for which the theory will be compatible with several different outcomes. 7/15

that was — I guess — a big surprise at the time, since a grail of Game Theory was “give me the game, I will tell you what has to happen”. 8/15

for different reasons, Mertens was not fully satisfied with the notion he and Kohlberg proposed. so he went back to work. this time drawing tools from algebraic topology. a field of mathematics in which only very few economists are verse. 9/15

Mertens published several papers polishing his notion of “stable equilibrium”, first on his own (1989, 1991), then with his student Srihari Govindan (2004). 10/15

at this point, most economists had lost track of what was happening. only a handful of them could understand the new papers. many of them were deeming the theory as irrelevant, because too mathematically complex. 11/15

how about Wilson? for him mathematical complexity doesn’t make a theory wrong, but it doesn’t make it right either. so he had to pounder and discuss. were Mertens’ arguments for his theory sound and right? did Mertens stability capture something that other concepts didn’t? 12/15

and his personal answer, as scientist was yes! there is definitely something there in Mertens stability. so he learned the tools and started working on it himself. 13/15

he teamed up with Govindan and wrote a series of papers (2008, 2009, 2012) on the topic, making important contributions rendering Mertens stability both more accessible and operational by computation methods 14/15

so that’s also what a great mind is about. someone who can learn from others, appreciate their intellectual arguments, do all the necessary work and pay all due credit. A GIANT. 15/15