The logic of backward induction

Itai Arieli and Robert Aumann

Journal of Economic Theory, 2015, vol. 159, issue PA, 443-464

Abstract: Call a perfect information (PI) game simple if each player moves just once. Call a player rational if he never takes an action while believing, with probability 1, that a different action would yield him a higher payoff. Using syntactic logic, we show that an outcome of a simple PI game is consistent with common strong belief of rationality iff it is a backward induction outcome. The result also applies to general PI games in which a player's agents act independently, rendering forward inferences invalid.

Keywords: Backward induction; Common strong belief; Perfect information; Syntactic interactive epistemology; Strong belief (search for similar items in EconPapers)
JEL-codes: C72 D83 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053115001271
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Logic of Backward Induction (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:159:y:2015:i:pa:p:443-464

DOI: 10.1016/j.jet.2015.07.004

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().