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Backward induction

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D.8 Subgame equilibrium | Game Theory - Microeconomics

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Backward Induction equilibrium example 3

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Game Theory 101: Backward Induction and the Escalation Game

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What is BACKWARD INDUCTION? What does BACKWARD INDUCTION mean? BACKWARD INDUCTION meaning

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Extensive form games and backwards induction

Backward induction is the process of reasoning backwards in time, from the end of a problem or situation, to determine a sequence of optimal actions. It proceeds by first considering the last time a decision might be made and choosing what to do in any situation at that time. Using this information, one can then determine what to do at the second-to-last time of decision. This process continues backwards until one has determined the best action for every possible situation at every point in time.
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    • Backward induction in decision making: an optimal-stopping problem 

    • Multi-stage game 

    • Backward induction in game theory: the ultimatum game 

    • Backward induction in economics: the entry-decision problem 

    • Backward induction paradox: the unexpected hanging 

    • Backward induction and common knowledge of rationality