Russell Crowe, who won the Oscar in 2001 for his role in Gladiator, stars in a new film called A Beautiful Mind. The film is based on the life of John Nash who won the Nobel Prize in Economics in 1994 and is derived from a brilliant biography of him by Sylvia Nasar also called A Beautiful Mind, which came out in 1998. Nash had earlier figured in Rebecca Goldstein's novel Mind-Body Problem.

Nash is actually a pure mathematician, an intuitive genius in the Ramanujan mould. He has had just one undergraduate course in international economics. He received his doctorate in mathematics from the renowned Princeton University in 1949 at the age of 21 and his dissertation was only 27 pages long. But that dissertation has had a most profound impact on economics, political science, nuclear strategy and biology.

However, Hollywood would not have made this film had Nash been just a prodigy. He was also a paranoid schizophrenic, a manic-depressive, a man who scaled intellectual heights for a brief while, then plumbed psychological depths for almost three decades and finally with the help of his wife and his peers re-emerged to share the Nobel accolade with John Harsanyi and Reinhard Selten. And just when Nash was returning to normalcy in the 1990s, his son, also a gifted mathematician who got a doctorate without completing school or college, started following in his father's psychotic footsteps.

What gives this man-who went from being brilliant to being hospitalised, treated and given up and then to mysteriously becoming normal-a place in the pantheon of greats? His contributions to mathematics at MIT and Princeton, where the great Harish-Chandra was his colleague, have been seminal. But it is his work on game theory that has brought him pervasive fame, although Nash himself considers this his most trivial work. Game theory is a theory of rational human choice and social behaviour based on logic, psychology and mathematics. It burst on the scene dramatically in 1944 with the publication of The Theory of Games and Economic Behaviour by John von Neumann and Oscar Morgenstern. This book dwelt with two-person, zero-sum situations-where one person's win is balanced exactly by the other's loss. Both cannot win at the same time.

Nash realised that such games of pure opposition have extremely limited applications in the real world where possibilities of compromise also exist and are explored by rivals. He distinguished between non-cooperative games of the type dealt with by Von Neumann and Morgenstern and cooperative games which involve cooperation, confrontation and competition. Every non-cooperative game with any number of players has at least one solution called the Nash equilibrium (an ironic oxymoron judging from his own life!) point. At a Nash equilibrium point, no player can unilaterally deviate to improve his or her position. Nasar writes, "Where Von Neumann's focus was the group and belief was in world government, Nash zeroed in on the individual ... By formulating the problem of economic competition in the way he did, Nash showed that a decentralised decision-making process could, in fact, be coherent."

Non-cooperative game theory and the Nash equilibrium are now considered the "core analytical methodology" alongside price theory in economic analysis. It is highly abstract and mathematical but has found a number of practical applications. In December 1994 the US Federal Communications Commission used it to auction airwaves for mobile telephony and raked in $7 billion from telecom companies. In the past few years, game theory principles have been used to devise market-based instruments for environmental control. Much earlier in the 1950s and '60s, game theory had been used extensively in the famous RAND Corporation to work out strategies to manage nuclear conflict.

Some of the pioneering work on the application of the game theory to contemporary economics have been done by Indian-born economists. Perhaps, the greatest names here are those of Avinash Dixit, who, like Nash, is at Princeton University and is widely considered to be a potential Nobel laureate, and Pradeep Dubey at the State University of New York, Stony Brook. Bhaskar Dutta and Prakash Chander of the Indian Statistical Institute in Delhi are two other notable names. Both Nash and Selten are coming to Delhi in December 2002 for a conference organised by the Society for the Promotion of Game Theory and its Applications whose president is Subhashis Gangopadhyay, one of India's most accomplished economists.

One of the numerous websites on Nash carries the haunting lines of John Dryden, who wrote in 1681: "Great wits are sure to madness near allied; And thin partitions do their bounds divide." Nash is not alone in this regard. But he is certainly the most unusual.

(The author is with the Congress party. These are his personal views)