Many business scenarios involve
dynamic games; these involve sequentialmoves, where one player moves first
and the other player moves afterwards, knowing the move of the first player.
Investing in building a newplant is an example of this situation. As we shall see,
the order of play can make a big difference to the outcome in such situations.
f. Discrete and continuous strategies
Discrete strategies involve situations where each action can be chosen from a
limited number of alternatives. In the PD game there are only two choices for
each player, to confess or not confess; thus this is a discrete strategy situation.
In contrast, a firm in oligopoly may have a virtually limitless number of prices
that it can charge;