tiny little RF source, and a detector, when the amplitude of the RF is exceeded, the light turns on, could be done with a compairtor, or if you wanted to get fancy, could try and get away with a darlinton transistor and diode for the detector,
the only trick here is to prevent each persons rf source from setting off there own detector, which would happen if they stood close enough to something reflective, like a bit of ungrounded metal,
if you wanted to increase the complexity a bit, use 2 frequencies, one for each person, and use a bandpass filter so the detector only detects the other persons signal strength is exceeded,