A Note on Bagwell's Paradox and Forward Induction in Three Classic Games

Stackelberg-like games show a situation where there is a clear advantage in moving first. In a thought provoking article, Bagwell [1995] shows that this advantage may not be robust against imperfect observations of the first move. We explore these ideas in the context of forward induction in three classic games, namely, the outside option game, the game of burning a dollar before the battle of the sexes and the beer-quiche game.