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Backward Induction Reasoning beyond Backward Induction

Emiliano Catonini & Antonio Penta

American Economic Journal: Microeconomics2026https://doi.org/10.1257/mic.20240361article
AJG 3ABDC A*
Weight
0.37

Abstract

Backward induction (BI) is only defined for perfect information games, but its logic is also invoked in many concepts for imperfect or incomplete information games. Yet, the meaning of BI reasoning is not clear in these settings, and we lack a way to capture the essence of BI without assuming equilibrium. We introduce backward rationalizability, a nonequilibrium solution concept for incomplete information games, which we argue distills the logic of BI reasoning. We show several of its properties and discuss a few applications, including a new version of Lipnowski and Sadler’s (2019) peer-confirming equilibrium. (JEL C72, C73, D83)

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https://doi.org/https://doi.org/10.1257/mic.20240361

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@article{emiliano2026,
  title        = {{Backward Induction Reasoning beyond Backward Induction}},
  author       = {Emiliano Catonini & Antonio Penta},
  journal      = {American Economic Journal: Microeconomics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1257/mic.20240361},
}

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Backward Induction Reasoning beyond Backward Induction

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.