backward induction

English

Noun

backward induction (usually uncountable, plural backward inductions)

1. (game theory) The process of reasoning backwards in time, from the end of a problem or situation, to determine a sequence of optimal actions.
   • 2021 December 14, Richard Partington, quoting Thomas Belsham, “Bitcoin could become ‘worthless’, Bank of England warns”, in The Guardian‎:

     Simple game theory tells us that a process of backward induction should, really, at some point, induce the smart money to get out. And were that to happen, investors really should be prepared to lose everything.

See also

• decision tree

Further reading

• backward induction on Wikipedia.Wikipedia