Strategic Interaction Models Every Growth Hacker Should Know
Introduction: Strategy Is Interaction
In growth strategy, you do not operate in isolation. Every pricing move, product launch or campaign triggers reactions from competitors, platforms or even customers. What looks like optimisation in a vacuum can backfire in a market shaped by response loops. That is why I use strategic interaction models — borrowed from game theory, microeconomics and behavioural science — to design growth plans that anticipate those responses, rather than react to them after the fact.
This article covers the most useful models I draw on when forecasting market behaviour, defending pricing, or shaping first-mover advantage. Each one is practical. I explain the logic and how I apply it in real projects, from DTC brand launches to SaaS feature wars.
1. Stackelberg Competition: Move First, Shape the Field
What it is: A sequential game where one firm moves first, and the other(s) react. The first mover sets quantity or strategy, gaining an advantage if the follower optimises given that move.
Key idea: Commit to a position early, forcing competitors to adapt rather than act freely.
Application: In a German ecommerce launch, I launched with fixed low-margin bundles before a large competitor could adjust pricing. They were unable to match without harming their premium perception. This gave us three months of pricing insulation and market share gain.
Mathematical insight: If leader chooses ( q_L ) and follower reacts with ( q_F(q_L) ), the leader maximises:
2. Cournot Competition: Simultaneous Quantity Decisions
What it is: A model where firms choose output levels simultaneously. Prices are determined by total quantity.
Key idea: Mutual influence through quantity, not price.
Application: In a SaaS market with limited onboarding capacity, I estimated competitor hiring and release cycles, and calibrated my freemium onboarding pace to saturate leads first. This made competitors look slower to respond.
3. Bertrand Competition: Price Wars and Undercutting
What it is: A price-setting game where firms undercut each other until price equals marginal cost — assuming homogeneous products.
Key idea: Price wars erode margins fast when products are near-identical.
Application: A client faced a price war in skincare ecommerce. Instead of matching price, I differentiated with guarantee and bundle logic — reframing the purchase value without lowering unit price.
Fix: Escape Bertrand traps by adding perceived differentiation or soft costs (loyalty, exclusivity, return policies).
4. Schelling Points: Coordination Without Communication
What it is: A focal point where players converge their actions without direct coordination — often due to cultural defaults or natural anchors.
Key idea: People coordinate based on what feels natural or obvious.
Application: For a UK fintech entering Austria, I designed onboarding sequences and pricing to match Austrian defaults (monthly invoices, SEPA direct debit, no cancellation notice). This improved trust and conversion — without ever asking users what they preferred.
5. Evolutionary Game Theory: Strategy Over Time
What it is: Strategies evolve based on performance. Winners replicate. Poor strategies die out.
Key idea: Iteration reveals what survives, not what is optimal on paper.
Application: In a DACH SaaS rollout, I tested three different signup flows. The one with the best LTV-to-CAC ratio over two months became the default. This natural selection approach outperformed predictive modelling.
6. The Prisoner's Dilemma: Trust Versus Short-Term Gain
What it is: A two-player game showing how rational choices can lead to worse outcomes if trust is missing.
Key idea: Cooperation beats betrayal — but only with future consequence.
Application: I coached a DTC founder to avoid short-term affiliate deals that undermined long-term brand equity. We built a loyalty system instead, preserving higher margin while keeping distribution aligned.
7. Tit for Tat: Strategy of Reciprocal Response
What it is: In repeated games, start cooperative and retaliate if exploited.
Key idea: Reward good behaviour, punish bad, forgive quickly.
Application: In a B2B lead ecosystem, I matched competitor pricing only when they cut first — and reverted to premium as soon as they raised again. This set an industry rhythm I could manage rather than chase.
8. Signalling Games: What Your Actions Say
What it is: In asymmetric information markets, your actions send signals.
Key idea: Price, messaging, or design reveals positioning or risk.
Application: I used ultra-formal onboarding design for a new HR SaaS entering Germany — even though the backend was lightweight. It signalled compliance and depth, winning us early enterprise interest before the feature set matured.
Final Thought: Growth Is a Strategic Game
You are never alone in the market. Every decision you make — timing, pricing, offers, product framing — sends a signal and invites a response.
When I apply strategic interaction models, I move from reaction to orchestration. These models do not make decisions for me, but they let me forecast the shape of response. That is the real advantage.
If you are launching into a crowded space, facing pricing pressure, or planning a move that competitors might counter — I can help you model the likely outcomes, and design strategies that stay one step ahead.