Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Backward induction can only be applied in simultaneous move games.
B
Game theory helps in analyzing strategic interactions among rational decision-makers.
C
Backward induction involves predicting opponents' moves to determine optimal strategies.
D
A dominant strategy is always guaranteed to exist in every game.
E
The game tree format is a useful tool for visualizing sequential move games.
Understanding the Answer
Let's break down why this is correct
Answer
Backward induction is a method that starts at the final decision nodes of a finite extensive‑form game with perfect information and works backward, choosing the best action at each node. When applied correctly, it always produces a subgame‑perfect equilibrium, which is a refinement of Nash equilibrium that eliminates non‑credible threats. The technique only works for games that end after a finite number of moves and where each player observes all previous actions (perfect information). For example, in a simple two‑player game where Player 1 chooses A or B, Player 2 then chooses C or D, backward induction tells us Player 2 will pick the best reply to each of Player 1’s choices, and Player 1 will anticipate that to choose the option that gives them the highest payoff. Thus, statements that backward induction yields a subgame‑perfect equilibrium, requires finite horizon, and applies to perfect‑information games are true.
Detailed Explanation
Game theory studies how people make choices when others also choose. Other options are incorrect because The idea that backward induction only works for simultaneous moves is wrong; The belief that every game has a dominant strategy is a misconception.
Key Concepts
Game Theory
Backward Induction
Dominant Strategy
Topic
Game Theory and Backward Induction
Difficulty
medium level question
Cognitive Level
understand
Practice Similar Questions
Test your understanding with related questions
1
Question 1What is the correct sequence of steps to apply backward induction in a sequential game scenario?
easyEconomics
Practice
2
Question 2Game Theory : Backward Induction :: Strategy : ?
hardEconomics
Practice
3
Question 3In a game where Player A moves first and Player B observes that move before making their own decision, which of the following scenarios best illustrates the concept of backward induction?
easyEconomics
Practice
4
Question 4In a sequential game, how does backward induction impact a player's strategy selection?
mediumEconomics
Practice
5
Question 5In a two-player game, if Player A anticipates Player B's response to their move, which strategy best exemplifies backward induction?
mediumEconomics
Practice
6
Question 6In a competitive game scenario where two players must decide their next move while anticipating each other's responses, which strategy best utilizes backward induction for optimal decision-making?
hardEconomics
Practice
7
Question 7In a two-player game scenario, which of the following strategies can effectively leverage backward induction to anticipate an opponent's moves? Select all that apply.
easyEconomics
Practice
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.