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should be just enough to make sure it's accepted
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knowing that the person who's receiving the offer in the first round
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is going to think about the offer they're going to make
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in the second round, and they're going to think about whether
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you're going to accept or reject in the second round, is that right?
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So that sounds like a bit of a mouthful
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but that mouthful of reasoning is exactly backward induction.
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It's exactly backward induction.
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It's saying: to figure out what I should do in the first round
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or what I should offer in the first round,
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I need to figure out whether Player 2 is going to accept or reject.
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And to figure out whether he or she is going to accept or reject,