Pöördusvalik

Pöördusvalik, also known as "reverse selection" or "backward induction" in English, is a strategic decision-making process used in game theory and economics to determine the optimal strategy for a player in a sequential game. The term "pöördusvalik" is derived from the Estonian language, where "pöördus" means "reverse" and "valik" means "choice."

In a sequential game, players make decisions in a specific order, and each player's decision can affect the subsequent decisions of other players. Pöördusvalik involves working backward from the final decision point to the initial one, considering the optimal choices for each player at each stage of the game. This process helps players anticipate the future consequences of their current decisions and choose the strategy that maximizes their payoff.

Pöördusvalik is particularly useful in situations where players have perfect information about the game, meaning they know the structure of the game and the payoffs for each possible outcome. By applying pöördusvalik, players can identify the Nash equilibrium, which is a set of strategies where no player can benefit by unilaterally changing their strategy.

In summary, pöördusvalik is a strategic decision-making process that involves working backward from the final decision point to the initial one, considering the optimal choices for each player at each stage of the game. This process helps players anticipate the future consequences of their current decisions and choose the strategy that maximizes their payoff.