A necessary and sufficient epistemic condition for playing backward induction

Dieter Balkenborg*, Eyal Winter

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

22 Scopus citations

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.

Original languageAmerican English
Pages (from-to)325-345
Number of pages21
JournalJournal of Mathematical Economics
Volume27
Issue number3
DOIs
StatePublished - Apr 1997

Keywords

  • Backward induction
  • Common knowledge
  • Extensive games
  • Subgame perfection

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