Behavioral & Game Theory · Walter

Walt’s Credible Threat

To end the series, Walter needs to find a way to get his money to his son, but he knows that the federal government would confiscate the money if he does it himself. Instead, he seeks help from his former business associations, Elliot and Gretchen Schwartz. He asks them to launder the money through their business so that it appears to be a charitable donation. The Schwartz’s agree, but because he’ll die soon, Walter has no guarantee that they will actually go through with the donation.

Walter tells the Schwartz’s that he’s hired “the best hitmen” that he could find and that if the money is not donated to his son shortly after his son’s 18th birthday then Elliot and Gretchen will be assassinated. In order for such a threat to be credible, Walter hires Pete and Badger to stand outside the house and point laser pointers at the two of them to have them believe they were actually snipers. Walter’s persona leads to his credibility as well.

See more:  asymmetric information, credible threat, game theory, imperfect information, incentives, insurance, opportunity cost, risk averse, strategic behavior, ultimatum game

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