(A) What Do Economists Mean by "Forward Induction"? (B) Now

Question 22

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(a) What do economists mean by "forward induction"? (b) Now consider the following minimum effort game from Van Huyck, Battalio and Beil (1990).
(a) What do economists mean by forward induction ? (b) Now consider the following minimum effort game from Van Huyck, Battalio and Beil (1990). (i) What typically happens to the minimum number chosen in the group when groups of subjects are asked to play this game? Why is the usual outcome surprising? (ii) Discuss, with an example (i.e. using numbers relevant to this payoff table), as to how a forward induction argument might help in solving the coordination problem in games like the one presented above. (i) What typically happens to the minimum number chosen in the group when groups of subjects are asked to play this game? Why is the usual outcome surprising? (ii) Discuss, with an example (i.e. using numbers relevant to this payoff table), as to how a forward induction argument might help in solving the coordination problem in games like the one presented above.

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