Empiriceme · Precept · Normative Principle

Backward Induction

Solve a sequential game by reasoning from the last move to the first, since only credible future actions constrain present ones.

Zermelo formalised it for chess in 1913. In negotiation it means working out what the other side will do in the last round, since only that constrains what they will accept now.

In practice

  • A tenant deciding whether to accept a rent rise works out what the landlord will do in August with an empty flat, and only then answers the March letter.
  • A team plans a launch by fixing the date customers must be able to buy, then working backwards to when the pricing page must be signed off.
Further reading
Wikipedia
Subject
Games & Strategic Interaction
Essay
The recurring shapes of conflict and cooperation

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