A Tribute to John von Neumann: The Math Genius Who Changed the World

Neumann János Lajos, better known as John von Neumann, was born in Budapest in 1903. A mathematician seemingly capable of turning his hand to any scientific endeavor, von Neumann’s work contributed to some of the most important innovations in the history of humankind. The one that’s, perhaps, had the biggest impact on society is the computer. Although he can’t take all the credit, von Neumann’s system for storing and processing data shaped the way modern computers operate.

Moving Beyond Simple Probability

Something else von Neumann also understood better than most was probability. In fact, it was his love of games and theory that led him to develop one of his most famous theories. Game theory was von Neumann’s attempt to formulate a strategy for poker, a game where certain variables are unknown. Von Neumann realized that poker was distinct from other casino games, such as slots. When you play online slot games, such as Golden Winner and Sweet Smash, the results are guided by two variables: return to player (RTP) rate and volatility.

“Game Theory in Transport&Logistic World” (CC BY-SA 2.0) by Sajjad Khaksari

The RTP is predicated on probability theory i.e. the symbols in a game, like Golden Winner, align in certain combinations based on probabilities. These probabilities determine how much of a return players can expect over an infinite number of spins. For example, the rarest symbol in Golden Winner is a Blue Bar. There are fewer blue bars than any other symbol, which means the probability of lining up three or more is lower. As such, the prizes for blue bar wins are worth more than they are for other symbols.

A player knows this. It’s a known variable. If they knew how many total symbols were in play, they could work out the probability of hitting a blue bar combination. Things are different in poker. It’s possible to work out the probability of making each poker hand based on the cards dealt. That’s a known variable. However, what you can’t account for are the moves a player will make. They could have a good hand, or they could be bluffing. Von Neumann wanted to develop a theory that accounted for this. In other words, he wanted to go beyond known probabilities.

A Theory of Games that Changed the World

“Gamin’” (CC BY 2.0) by Todd Huffman

You can read more about the nuances of game theory here. In simple terms, game theory relies on the idea that you can make an optimal move that, over time, will be profitable regardless of the reaction it elicits in an opponent. That’s useful for poker players but, as von Neumann asserted in, the Theory of Games and Economic Behavior, it’s also useful for economists, psychologists, sociologists, politicians, and army generals. The full applications of game theory in each of these areas is beyond the scope of this article.

The point we’re making though is that John von Neumann helped shape the world we live in through his mathematical theories. Most people focus on his contributions to computing. While they’re certainly important, it’s his passion for games and mathematics that may have had the greatest impact. Indeed, with game theory underpinning many of today’s economic policies, army tactics, and poker strategies, we all owe a debt of gratitude to one of Hungary’s most famous sons.