In the case in which parties interact with one another for an infinite or indefinite amount of time,the logic of backward induction breaks down.

Question

Quizplus · Accepted Answer

The logic of backward induction relies on the assumption that parties have a finite number of moves, and therefore can reason backwards from the end of the game. However, in a game with infinite or indefinite interactions, there is no clear end point and thus backward induction cannot be applied.

In the Case in Which Parties Interact with One Another