Game Trees in Business Strategy

Two Kinds of Strategic Interation: Sequential & Simultaneous

The essence of a game of stratefy is the interdependence of the players' decisions. Theses interactions arise in two ways. The first is sequential; each player makes alterning moves. The players must look ahead to how his current actions will affect the future actions of others, and his own future actions in turn. The second is simultaneous; the players act at the smae time, not knowing what the others' current actions. When you play a strategic game, you must determine whther the interation is simultaneous or sequential.

Sequential-move games

Rule 1: Look Ahead & Reason Back