Backward Induction versus Forward Induction Reasoning

Andres Perea
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Andres Perea: Department of Quantitative Economics, Maastricht University, P.O. Box 616, 6200 MD Maastricht, The Netherlands

Games, 2010, vol. 1, issue 3, 1-21

Abstract: In this paper we want to shed some light on what we mean by backward induction and forward induction reasoning in dynamic games. To that purpose, we take the concepts of common belief in future rationality (Perea [1]) and extensive form rationalizability (Pearce [2], Battigalli [3], Battigalli and Siniscalchi [4]) as possible representatives for backward induction and forward induction reasoning. We compare both concepts on a conceptual, epistemic and an algorithm level, thereby highlighting some of the crucial differences between backward and forward induction reasoning in dynamic games.

Keywords: epistemic game theory; backward induction; forward induction; algorithms (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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