Explain Backward Induction Method and Extensive Form of Game through relevant examples in the soft drinks...

Explain Backward Induction Method and Extensive Form of Game through relevant examples in the soft drinks industry.

Expert Solution

• Backward induction is the process of reasoning backwards in time, from the end of a problem or situation, to determine a sequence of actions.
• It is widely used in Game Theory.
• It is a solution theory.
• With respect to game theory, backward induction is a method used to compute subgame perfect equilibria in sequence games.
• It considers the last time decisions and chooses what to do in next situation.
• One can decide the next decision with regards to previous time decisions.
• This process continues backward until the best result is not obtained by the player.

Rahul Sunny answered 7 months ago

Explain Backward Induction Method and Extensive Form of Game through relevant examples.

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