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Strategic sophistication of individuals and teams in experimental normal-form games

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Author Info

  • Matthias Sutter

    ()

  • Simon Czermak

    ()

  • Francesco Feri

    ()

Abstract

We present an experiment on strategic thinking and behavior of individuals and teams in one-shot normal-form games. Besides making choices, decision makers have to state their first- and second-order beliefs. We find that teams play the Nash strategy significantly more often, and their choices are more often consistent by being a best reply to first order beliefs. We identify the complexity of a game and the payoffs in equilibrium as determining the likelihood of consistent behavior according to textbook rationality. Using a mixture model, the estimated probability to play strategically is 62% for teams, but only 40% for individuals.

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File URL: http://eeecon.uibk.ac.at/wopec2/repec/inn/wpaper/2010-02.pdf
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Bibliographic Info

Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2010-02.

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Length: 62
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:inn:wpaper:2010-02

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Web page: http://www.uibk.ac.at/fakultaeten/volkswirtschaft_und_statistik/index.html.en
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Keywords: Strategic sophistication; beliefs; experiment; team decision making; individual decision making;

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References

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Cited by:
  1. Simon Czermak & Francesco Feri & Daniela R?tzler & Matthias Sutter, 2010. "Strategic sophistication of adolescents ? Evidence from experimental normal-form games," Working Papers 2010-15, Faculty of Economics and Statistics, University of Innsbruck.
  2. Tamar Kugler & Edgar E. Kausel & Martin G. Kocher, 2012. "Are Groups more Rational than Individuals? A Review of Interactive Decision Making in Groups," CESifo Working Paper Series 3701, CESifo Group Munich.

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