ABSTRACT
In this chapter we explore the basic elements of dynamic games under conditions of complete and perfect information. Dynamic games are also referred to as sequential-move or multistage games. Dynamic games differ from static games in that the players move in sequence, that is, they take turns. When playing dynamic games, each player attempts to determine a rival’s most likely responses, and uses that information to formulate an optimal strategy. As the game proceeds, each player acquires information about a rival’s strategy based on earlier moves and countermoves. This information is used to update a player’s strategy whenever possible.
