Sequential Move Game:

In this game, players instead of choosing their strategies simultaneously, choose them sequentially.

Example: Stackelberg model in a game theoretic set-up

Let the demand function be p = p (q) where and let cost function be c = c_i(q_i), where i= A, B. We assume that firm A is the leader and B is the follower, in the sense that, firm A can predict or foresee the strategy of firm B perfectly. Thus, firm B moves first without knowing the strategy of firm A and given the strategy undertaken by firm B, firm A chooses the strategy to maximise her project. Therefore, from profit-maximising exercise of the firm B, we get,

Firm A incorporates the optimum strategy chosen by firm B i.e., into the production function and thus we have,

Solving the above equation, we get representing the Stackelberg equilibrium.