The Centipede Game
Two players alternate over 100 rounds. Each round, the active player either takes the larger share of a growing pot (ending the game) or passes, which doubles the pot. Passing when the opponent will take next round leaves you worse off than taking now. In the unique subgame perfect equilibrium, on which round does the game end?
Related problems & prerequisites
Worth solving first
- Traveler's Dilemma 7.0/10
- Hawk-Dove 7.0/10
- The Rational Ultimatum 6.0/10
Source: Introduced by Robert Rosenthal (1981). Statement written for AxiomIQ.