Question

In the 2000 U.S. presidential contest, Al Gore was advised by his strategists to wait for George W. Bush to announce his vice-presidential running mate before making his own decision on a running mate. Under what circumstances would Gore be better off giving Bush a head start on putting together his presidential ticket? What kind of strategic situation is this?

Please explain in detail.

Answer 1

Here the decision which was made , where this allows a second mover advantage which is caused by sequential decision making strategy.

(Sequential decision making strategy is where the decision maker being in a situation makes successive observations of the process and by that the decision maker takes the final decision.)

Here when Al Gore waits and allows Bush to make an announcment about his vice presential running mate , before taking or announcing any decision, by this he will have an advantage and he will know his rival's course of action and because he waited he will now be able to choose a suitable candidate against him. So , in theory AL Gore have the better odds against him at winning the election, only when Al Gore chooses a suitable candidate.

This situation is also called backward induction method ,where this can be analyzed that after reversing the order , did it increase the payoffs by being the second mover.