Thomas Schelling, Robert Aumann and Interactive Decision Theory (2005 Nobel Prize in Economics)

The paper describes the contributions of T. Schelling and R. J. Aumann, the Nobel Prize laureates of 2005 in economics, to modern economics and social sciences. Their key contributions were in the field of the game theory - a major tool to study human interactions and rational behavior in a wide variety of contexts, from applied industrial organization to labor economics, public policy, international relations and political science. Works by Aumann and Schelling were pathbreaking in this respect, and have paved the way to many modern developments that enhance our understanding of human rationality.