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It is not the case that The paradox of backward induction is primarily a problem for normative theories of rationality, not for non-psychological game theory
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Reasons For
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Reason for 1 of 2
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1.
Non-psychological game theory still presupposes solution concepts (e.g., subgame perfect equilibrium) that implicitly encode normative rationality assumptions.
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2.
Binmore's own defense of backward induction in evolutionary terms still requires agents to behave 'as if' rational at each node, preserving the normative paradox structurally.
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Reason for 2 of 2
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1.
Stalnaker and Reny demonstrate that backward induction requires common knowledge of rationality, a condition that is self-undermining at off-path nodes regardless of psychological interpretation.
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2.
If the paradox infects the epistemic foundations of any solution concept requiring sequential rationality, the psychological/non-psychological distinction cannot quarantine the problem.
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Reasons Against
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Reason against
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1.
Non-psychological game theorists can account for apparently irrational play through empirical learning dynamics rather than normative rational requirements
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2.
The paradox of backward induction only generates a problem when game theory is viewed as contributing to a normative theory of strategic rationality
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