“This newsletter serves a demographic of highly intelligent readers, and deep thinkers with a passion for ideas, critical thinking, strategic game theory, and a desire to understand the world around them. Readers of my posts are usually tired of being patronized elsewhere by fact-less, opinionated know-nothings, misinformation, conspiracy theories, and fake news.
“Knowledge is power, wisdom brings meaning, contentment, and happiness!”
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On a personal note: Please excuse grammatical errors, typos, repetition, and any general nonsense, and such in this post. I am getting a bit older now, and I have about 20,000 pages of information that must get published before I leave the mortal coil. I simply write and publish more than my humble editors are able to correct. If you find enough errors you are welcome to contact me about being an editor of my work.
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A 3 - Minute Read
Q. Lewis, how can a person solve problems with backward induction?
A. Backward induction is the process of reasoning backward in time, from the end of a problem or situation, to determine a sequence of optimal (the best actions.
It proceeds by first considering the last time a decision might have been made - and choosing what to do in any situation at that time. Using this information, one can then determine what to do in the second-to-last time of decision. This process continues backward until one has determined the best action for every possible situation (i.e. for every possible information set) at every point in time.
Backward induction has been used to solve problems and to create strategies in games as long as the field of game theory has existed. John von Neumann and Oskar Morgenstern suggested solving zero-sum, two-person games by backward induction in their pioneering book Theory of Games and Economic Behavior (1944), the book that established game theory as a field of study.
Let’s explore this concept as if teaching a child. At each stage of problems solving process or game, a player can use backward induction to determine the optimal strategy of the player who makes the last move that was taken in the process or game. This process continues. Next, then, the optimal action of the next-to-last moving player is determined, taking the last player's action as given. This process continues backward until the best action for every point in time has been determined.
The Takeaway
The challenge in using Backward Induction to solve problems. This is not a fact-based system or a process of deductive reasoning. It is often found that the results inferred from backward induction often fail to predict actual human behavior. Remember that most humans are emotionally driven in their decision-making process though they may re-frame what they are doing to make it appear logical or rational. The truth is that “rational” behavior (as predicted by game theory) is seldom exhibited in real life. Often, it is the most Irrational player, but also the most influential that can end up obtaining higher payoffs and benefits than predicted by backward induction. This is illustrated in the centipede game*.
I often use this game as an educational tool for young people interested in learning about HAGT (Harrison’s Applied Game Theory, and Life Strategies. Click on the chessboard below to learn more about my Life Strategies Course and Mentoring Method
I wrote an article on game theory and logical thinking for my students. See below
Here is a short video about some of what I am working on in the realm of personal development and self-improvement.
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Author: Lewis is a writer, teacher, and master results-oriented life coach. He is the author of over twenty books, numerous self-improvement, and personal development courses, and is the former host of a talk show on NPR Affiliated WIOX91.3 FM. He can be contacted at LewisCoaches@gmail.com
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