Games and Phone Numbers: Do Short Term Memory Bounds Affect Strategy Behavior?
AbstractResearch in experimental and behavioral game theory has revealed a substantial and persistent degree of heterogeneity in the strategic behavior of real individuals. While the prevailing theoretical explanations of the observed heterogeneity typically invoke underlying differences in beliefs among the population of players, we argue that a further source of heterogeneity may consist in the individuals' different ability to process information, of which short term memory capacity provides a measurable proxy. Research in cognitive psychology has shown that individuals typically differ in their short term memory capacity; furthermore, short term memory capacity provides a fundamental cognitive bottleneck to our ability to process information efficiently and hence seems correlated with performance in a variety of problem solving and reasoning tasks. In this paper we conduct experiments on a set of well-known games whose solution concepts require the application of some paradigmatic forms of strategic reasoning, such as iterated dominance, reasoning about common knowledge and backward induction. We separately conduct standard short term memory tests on our subjects to detect the presence of a correlation between individuals' behavior in the games - here defined in terms of degrees of conformity to the standard game-theoretic prescriptions - and their short term memory score. Our results show the presence of a significant and positive correlation between subjects' short term memory score and conformity to standard game-theoretic prescriptions in the games, thus confirming our hypothesis. While the robustness of our conjecture awaits to be confirmed by further data gathering in more interactive experimental settings, our preliminary results suggest a promising line of inquiry on the interconnections between information processing capacity and strategic behavior
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Computer and Management Sciences, University of Trento, Italy in its series ROCK Working Papers with number 018.
Length: 25 pages
Date of creation: Jan 2002
Date of revision: 13 Jun 2008
Postal: DISA Università degli Studi di Trento via Inama, 5 I-38122 Trento TN Italy
Other versions of this item:
- Devetag, Giovanna & Warglien, Massimo, 2003. "Games and phone numbers: Do short-term memory bounds affect strategic behavior?," Journal of Economic Psychology, Elsevier, vol. 24(2), pages 189-202, April.
- Maria Giovanna Devetag & Massimo Warglien, 2002. "Games and phone numbers: do short term memory bounds affect strategic behavior?," CEEL Working Papers 0211, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Camerer, Colin, 1995. "Rules for Experimenting in Psychology and Economics, and Why They Differ," Working Papers 946, California Institute of Technology, Division of the Humanities and Social Sciences.
- Darryl Seale & Amnon Rapoport, 2000. "Elicitation of Strategy Profiles in Large Group Coordination Games," Experimental Economics, Springer, vol. 3(2), pages 153-179, October.
- Eyal Winter & Amnon Rapoport & Darryl A. Seale, 2000. "An experimental study of coordination and learning in iterated two-market entry games," Economic Theory, Springer, vol. 16(3), pages 661-687.
- Geanakoplos, John, 1994. "Common knowledge," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 40, pages 1437-1496 Elsevier.
- Ronald Fagin & Joseph Y. Halpern & Yoram Moses & Moshe Y. Vardi, 2003. "Reasoning About Knowledge," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262562006, December.
- Ho, Teck-Hua & Camerer, Colin & Weigelt, Keith, 1998.
"Iterated Dominance and Iterated Best Response in Experimental "p-Beauty Contests.","
American Economic Review,
American Economic Association, vol. 88(4), pages 947-69, September.
- Ho, Teck Hua & Weigelt, Keith & Camerer, Colin, 1996. "Iterated Dominance and Iterated Best-Response in Experimental P-Beauty Contests," Working Papers 974, California Institute of Technology, Division of the Humanities and Social Sciences.
- Costa-Gomes, Miguel & Crawford, Vincent P & Broseta, Bruno, 2001.
"Cognition and Behavior in Normal-Form Games: An Experimental Study,"
Econometric Society, vol. 69(5), pages 1193-1235, September.
- Miguel Costa-Gomes & Vincent P. Crawford & Bruno Broseta, . "Cognition and Behavior in Normal-Form Games:An Experimental Study," Discussion Papers 00/45, Department of Economics, University of York.
- Costa-Gomes, Miguel & Crawford, Vincent P. & Broseta, Bruno, 1998. "Cognition and Behavior in Normal-Form Games: An Experimental Study," University of California at San Diego, Economics Working Paper Series qt1vn4h7x5, Department of Economics, UC San Diego.
- Broseta, Bruno & Costa-Gomes, Miguel & Crawford, Vincent P., 2000. "Cognition and Behavior in Normal-Form Games: An Experimental Study," University of California at San Diego, Economics Working Paper Series qt0fp8278k, Department of Economics, UC San Diego.
- Ariel Rubinstein, 1997.
"Modeling Bounded Rationality,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262681005, December.
- Schotter Andrew & Weigelt Keith & Wilson Charles, 1994. "A Laboratory Investigation of Multiperson Rationality and Presentation Effects," Games and Economic Behavior, Elsevier, vol. 6(3), pages 445-468, May.
- Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-26, December.
- Roberto Weber, 2001. "Behavior and Learning in the â€œDirty Facesâ€ Game," Experimental Economics, Springer, vol. 4(3), pages 229-242, December.
- Abreu, Dilip & Rubinstein, Ariel, 1988. "The Structure of Nash Equilibrium in Repeated Games with Finite Automata," Econometrica, Econometric Society, vol. 56(6), pages 1259-81, November.
- Stahl, Dale II & Wilson, Paul W., 1994. "Experimental evidence on players' models of other players," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 309-327, December.
- Maria Giovanna Devetag & Massimo Warglien, 2002. "Representing others' preferences in mixed motive games: was Schelling right," CEEL Working Papers 0208, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
- Johnson, Eric J. & Camerer, Colin & Sen, Sankar & Rymon, Talia, 2002. "Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining," Journal of Economic Theory, Elsevier, vol. 104(1), pages 16-47, May.
- Herbert A. Simon, 1996. "The Sciences of the Artificial, 3rd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691914, December.
- Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Loris Gaio).
If references are entirely missing, you can add them using this form.