Forward induction reasoning revisited

Abstract

Battigalli and Siniscalchi (2002) formalize the idea of forward induction reasoning as "rationality and common strong belief of rationality" (RCSBR). Here we study the behavioral implications of RCSBR across all type structures. Formally, we show that RCSBR is characterized by a solution concept we call extensive form best response sets (EFBRS's). It turns out that the EFBRS concept is equivalent to a concept already proposed in the literature, namely directed rationalizability (Battigalli and Siniscalchi 2003). We conclude by applying the EFBRS concept to games of interest. ? 2012 Pierpaolo Battigalli and Amanda Friedenberg.