Core Models for Competitive Analysis

Distinguish between simultaneous-move and sequential-move games.

Represent a sequential decision, such as market entry, using a game tree.

Use backward induction on a game tree to find the optimal sequence of moves.

Model a simultaneous decision, such as pricing, using a payoff matrix.

Identify a Nash Equilibrium as a stable outcome where no player wishes to unilaterally change their strategy.

Use the Prisoner's Dilemma model to understand why mutually beneficial cooperation can be difficult to achieve.