Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved
As it stands, our best prediction for this game is still the one arrived at by backwards induction. Any other solution requires that one or both players make promises that are unlikely to be believable or credible.
Game trees or extensive form can be used to express almost any game though they are most useful when the sequence of decisions is important. In more advanced courses this representation is often useful for games of incomplete information as well.
Game theory is a huge field both within and outside of economics. We have barely touched on it here but if you go on in economics you will find it used in a variety of settings.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved