Decision-making and the Backward Induction Argument

The traditional form of the backward induction argument, which concludes that two initially rational agents would always defect, relies on the assumption that they believe they will be rational in later rounds. Philip Pettit and Robert Sugden have argued, however, that this assumption is unjustified. The purpose of this paper is to reconstruct the argument without using this assumption. The formulation offered concludes that two initially rational agents would decide to always defect, and relies only on the weaker assumption that they do not believe they will not be rational in later rounds. The argument employs the idea that decisions justify revocable presumptions about behavior.