To find credible equilibria we solve the game backwards to eliminate non-credible threats.Group of answer choicesTrueFalse

The statement provided is True.

In game theory, solving a game backwards, known as backward induction, is a technique used to determine optimal strategies and equilibria. When analyzing extensive-form games, some strategies may constitute non-credible threats, meaning that they would not be rational for a player to carry out. By employing backward induction, we examine the game from the last possible decision point to the first, ensuring that each player's strategy is credible and rational given the payoffs.

By eliminating non-credible threats, we narrow down the strategies players would realistically adopt, thus helping identify credible equilibria. This process aids in refining predictions about players' behavior in strategic situations, ultimately leading to a more accurate analysis of the game dynamics. Therefore, the method of solving a game backwards effectively facilitates the identification of credible equilibria in strategic interactions.