Title: Forward Induction: Experimental Evidence From Two-Stage Games With Complete Information
Abstract:Forward induction is the general notion that the sequence of decisions leading to a subgame can be interpreted as a type of communication that can rule out unreasonable beliefs in the subgame, includi...Forward induction is the general notion that the sequence of decisions leading to a subgame can be interpreted as a type of communication that can rule out unreasonable beliefs in the subgame, including some beliefs that are consistent with the backward-induction rationality of a sequential equilibrium. Subjects participated in a sequence of two-stage experimental games with multiple sequential equilibria. Decisions are generally consistent with the equilibrium outcome that is not eliminated with forward-induction arguments, and this consistency increases with experience.Read More
Publication Year: 1989
Publication Date: 1989-01-01
Language: en
Type: preprint
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Cited By Count: 12
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