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A Necessary and Sufficient Epistemic Condition for Playing Backward Induction

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Author Info
Balkenborg, Dieter
Eyal Winter

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Abstract

In an epistemic framework due to Aumann we characterize the condition on the rationality of the players that is both necessary and sufficient to imply backward induction in perfect information games in agent form. This condition requires each player to know that the players are rational at later, but not at previous decision nodes.

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Publisher Info
Paper provided by University of Bonn, Germany in its series Discussion Paper Serie B with number 331.

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Length: pages
Date of creation: Oct 1995
Date of revision:
Handle: RePEc:bon:bonsfb:331

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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 9221
Web page: http://www.bgse.uni-bonn.de/index.php?id=517

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Related research
Keywords: backward induction; common knowledge; epistemic logic;

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

Cited by:
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  1. Asheim,G.B., 1999. "On the epistemic foundation for backward induction," Memorandum 30/1999, Oslo University, Department of Economics. [Downloadable!]
    Other versions:
  2. Antonio Quesada, 2002. "Belief system foundations of backward induction," Theory and Decision, Springer, vol. 53(4), pages 393-403, December. [Downloadable!] (restricted)
  3. Perea,Andrés, 2004. "Minimal Belief Revision leads to Backward Induction," Research Memoranda 032, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
  4. Perea, Andrés, 2006. "Nash Equilibrium as an Expression of Self-Referential Reasoning," Research Memoranda 035, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
  5. Adam Brandenburger, 2007. "The power of paradox: some recent developments in interactive epistemology," International Journal of Game Theory, Springer, vol. 35(4), pages 465-492, April. [Downloadable!] (restricted)
  6. Perea,Andrés, 2003. "Rationalizability and Minimal Complexity in Dynamic Games," Research Memoranda 047, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
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This page was last updated on 2009-11-25.

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