In a sequential game where two players have to decide their strategies, how does backward induction help in finding the Nash equilibrium?

In a sequential game, players make decisions one after the other, and backward induction is a method used to find the best strategies for each player. This process starts by looking at the last move of the game and determining what the best choice would be for the player making that move. Then, knowing this, we go back to the previous player and figure out their best response, considering the future choices of the next player. This continues until we reach the first player's decision. For example, in a game where Player A goes first and can choose between two options, and Player B reacts based on A's choice, backward induction helps us determine the optimal strategies by analyzing the game from the end back to the beginning, leading to a Nash equilibrium where neither player has an incentive to change their strategy.