Backward Induction
Updated 2026-09-11
INTRODUCTION
English translation pending.
CORE DEFINITION
Backward induction solves a sequential game or a multi-stage decision by beginning at the terminal state, determining the optimal choice there, and then reasoning one step at a time back to the present. Its proposition is that a rational plan must be time-consistent: what you would actually do at the last step constrains what is optimal at every earlier one. The key condition is common knowledge of rationality among the players.
SCAFFOLDING EFFECT
Reduce cognitive load
- Start at the end: fix what happens at the terminal move before anything else. - Roll the logic back: use the last choice to determine the best choice at each earlier node. - Commit only to plans: discard any first move that the final move would later undo.
Anchor fast decisions
In a finite sequential game the last move has no future to bargain with, so its optimal action can be pinned down first. That fixed answer determines the best response at the preceding node, and the chain unwinds step by step back to the start.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Backward_inductionverified
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