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Cognitive abilities and behavior in strategic-form games

By Ludovic Renou and Ralph Bayer

Abstract

This paper investigates the relation between cognitive abilities and\ud behavior in strategic-form games with the help of a novel experiment.\ud The design allows us first to measure the cognitive abilities of sub-\ud jects without confound and then to evaluate their impact on behavior\ud in strategic-from games. We find that subjects with better cognitive\ud abilities show more sophisticated behavior and make better use of\ud information on cognitive abilities and preferences of opponents. Al-\ud though we do not find evidence for Nash behavior, observed behavior\ud is remarkably sophisticated, as almost 80% of subjects behave near\ud optimal and outperform Nash behavior with respect to expected pay-offs

Topics: cognitive ability, behaviors, strategic-form games, experiments, preferences, sophistication
Publisher: Dept. of Economics, University of Leicester
Year: 2011
OAI identifier: oai:lra.le.ac.uk:2381/9262

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