99.8% of the Veronica Mars fandom in one GIF
Hi Xerx! I actually did take a semester of Game Theory in college :)
Backward induction is when you find the best strategy by looking at the last move of a game. Whoever makes the last move is going to choose the option that rewards them the best. The player who chooses second to last knows what decision the last player will make, and chooses the best option with that knowledge and so on and so forth.
For example! Because game theory works best visually.
We start with Player 2’s options. If Player 1 chose Left, Player 2 could choose Up and get 3, or Down and get 2. If we are assuming all the players are rational, Player 2 would choose Up.
If Player 1 chose Right, Player 2 could choose Up and get 2 or Down and get 1. Player 2 would choose Up. In every situation, Player 2 would choose Up.
Knowing this, Player 1 could choose Left, and Player 2 would choose Up and Player 1 would get 1, or Player 1 could chose Right and Player 2 would choose Up and Player 1 would get 4. It would be optimal for Player 1 to choose Right.