Game Theory

Management > Crisis Management > Lectures > Independent Research > Game Theory > Nash equilibrium > Business Nash Equilibrium > Strictly dominant strategies > SDS for companies > IEDS > Minimax > Backward induction > Forward induction

Forward induction

Forward induction is where you choose what to do based on your observations of your opponent’s past behaviours and assume they will be the same in the present game.

In preparation for a crisis managers can examine past crises in other firms and industries to understand how employees at all levels behaved in those abnormal times. They can use this information to try and predict how people will react during a crisis in the current firm.

It will not be entirely accurate, as "there is no such thing as a routine crisis" according to Boin and Lagadec (2000), but it can be helpful as a preparation technique all the same.