Consider the simple game tree shown to the right. Purple nodes and the notation F1 represent Firm 1's moves, Green nodes and the notation F2 indicate Firm 2 choices. The numbers at the end are payoffs. The first number in each pair is Firm 1's payoff, the second is Firm 2's.

  Suppose Firm 2 only introduces and markets new products after waiting to see what Firm 1 does. The choices facing Firm 1 are to introduce and market a New Product or to market its Old Product. ; Once Firm 1 has made its decision then Firm 2 must decide whether or not to introduce a New Product or to market its Old Product.

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