Backward Induction

Think from the end

An interactive lesson with 6 steps, about 5 minutes: you predict, drag and solve, with instant feedback on every answer. It runs in your browser and needs JavaScript.

What you’ll learn

• Solve sequential games backwards from the end.
• Threats that wouldn’t be carried out are not credible.
• Real people often depart from backward induction (ultimatum, centipede).

Steps

1. Games in turns
2. An empty threat
3. The ultimatum game
4. The centipede
5. Game trees grow fast
6. Pirates