Agent connectedness and backward induction

Bach, C. W. and Heilmann, C. (2011) Agent connectedness and backward induction. International Game Theory Review, 13 (02). pp. 195-208. ISSN 1793-6675 doi: 10.1142/S0219198911002940

Abstract/Summary

We conceive of a player in dynamic games as a set of agents, which are assigned the distinct tasks of reasoning and node-specific choices. The notion of agent connectedness measuring the sequential stability of a player over time is then modeled in an extended type-based epistemic framework. Moreover, we provide an epistemic foundation for backward induction in terms of agent connectedness. Besides, it is argued that the epistemic independence assumption underlying backward induction is stronger than usually presumed.