Economics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 19

You are playing a game with a friend. It's your move but you don't have a dominant strategy. Your payoff depends on what your friend does after your move. You consider flipping a coin to decide what to do. You are about to reach for a coin, but then you realize that your friend has a dominant strategy. Explain how using backward induction (rather than a coin toss) will now determine your next move.