Game trees, sequential moves, and information sets
🎯 Hook
💡 Intuition
📚 Theory
🎮 Playground
✏️ Practice
Thinking in Trees
Why does a threat to "fight" often fail to deter entry?
The answer lies in extensive form games - analyzing games through the lens of sequential moves and credible commitments.
The Challenge: Market Entry Decision
You are a startup considering entering a market dominated by an incumbent firm. If you enter, the incumbent can either Fight (price war) or Accommodate (share the market). The incumbent has publicly threatened to fight any new entrant. Should you believe them?
Try it! Make your choice to see how extensive form reasoning reveals the equilibrium outcome.
