First mover advantage
Moving first pays when the move cannot be taken back, so the other side has no choice but to respond to it.
Often misread asAssuming that moving first is generally better because of the commitment story, and overlooking the games where revealing your move simply lets the other side beat it.
How to see it
Going first helps only when being seen helps
Moving first can be an advantage, because it lets you commit and forces the other side to respond. It can equally be a disadvantage, because it tells them exactly what you did. Which one it is depends on the game, not on the fact of being first.
The checkAsk whether you gain more from committing than you lose from being seen; in matching pennies, going first loses outright.
Try itCompare Stackelberg competition, where the leader does better than in the simultaneous game, with rock paper scissors played openly in sequence. The same change to the rules, opposite effects, and the difference is how far the interests conflict.
Games that show it
Know these first
Easily confused with
Sources
- Tirole, J. (1988). MIT Press.
- Dixit, A. & Nalebuff, B. (1991). W. W. Norton.