Question

Game Theory: Why do strategic moves affect the outcome of a one-shot sequential game, but not a one-shot

simultaneous game? Does this change if the games change from one-shot to repeated?

Answer 1

In a simultaneous game we have the players acting together non cooperatively and so the question of strategy does not arise. Each player does the best he can given what the other person does. There is no question of pre-emption and each player does the best for himself. In case of a sequential game the player has to consider what the other player would do given his actions and so the question of strategy and strategic moves comes into the picture. Backward induction is also derived in such a way in that strategically strategies are chosen given what players further in the tree will do.In case of repeated games the idea of strategy is also important in a simultaneous move game as a deviation in the current play of the game can mean retaliation later on. So strategy becomes important here as well.