Thinking through your opponent’s likely responses before you make your decisions remains the essence of strategic thinking and the basis of game theory. Game theory gives us a formal way to think about how companies and people should act in these environments. To figure out the equilibrium in an oligopolistic market in which firms must interact strategically with each other, we need to understand the exact rules of the game (Who are the players? What are their payoffs? Are they making decisions simultaneously or sequentially?). Once we understand the game and how it’s being played, we can figure out what the equilibrium should be. It’s more difficult to predict outcomes in markets with small numbers of players who interact strategically, but it is important and—as the example of the iPad and the Samsung Galaxy Note indicate—very common in the real world.

Even in situations in which people choose their actions strategically, there are often some obvious equilibria that the games will gravitate toward. These can vary a lot depending on whether the games involve repeated interactions or if the decisions become sequential and one player moves followed by the other one, and so on.

As long as you (or a firm or a government) are thinking about how your opponent will react when you are making your decisions, you are using game theory. It will not only improve your chess game, it will make you a better economist.