In many business situations one firm will act first, and then other firms will respond.What do economists use to help analyse these types of situations?

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Economists use sequential games to analyze situations where one firm acts first and others respond. Sequential games involve players making decisions in a predetermined order, taking into account the possible actions and reactions of the other players. This type of game theory is commonly used in analyzing strategic interactions among businesses. Retaliation games typically involve a tit-for-tat strategy, where players retaliate against an opponent's action. Follow-the-leader games refer to situations where firms simply copy the actions of other firms, without necessarily considering the strategic implications. Bargaining games involve negotiation and compromise between players to achieve a mutually beneficial outcome.

In Many Business Situations One Firm Will Act First, and Then