Explore how backward induction helps solve game theory problems by working from the end backward to determine optimal actions. Learn with practical examples.

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Eric's career includes extensive work in ...

Game theory helps investors predict outcomes in markets where decisions impact each other. Understanding game theory equips investors to strategically anticipate market actions. Game theory-informed ...

Ever wonder how nodes are incentivized in a blockchain to ensure trust, consensus and cooperation in a system with no central authority? The answer lies in game theory, the mathematical study of ...

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The original version of this story appeared in Quanta Magazine. Imagine you had a friend who gave different answers to the same question, depending on how you asked it. “What’s the capital of Peru?” ...

Imagine you had a friend who gave different answers to the same question, depending on how you asked it. “What’s the capital of Peru?” would get one answer, and “Is Lima the capital of Peru?” would ...