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Strategic Thinking Skills: A Key to Collective Economic Success

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  • Syngjoo Choi
  • Seonghoon Kim
  • Wooyoung Lim

Abstract

We conduct a large-scale experiment to measure elementary aspects of strategic thinking skills and their linkage to labor market outcomes. Two incentivized measures of higher-order rationality and backward induction are developed. Males' (females') strategic thinking skills are positively (negatively) associated with individual labor income. However, among married individuals, strategic thinking skills are significantly and positively associated with their household labor income regardless of gender, highlighting the importance of strategic thinking skills for collective economic success. We argue that the intrahousehold channels encompassing collective labor supply with home-to-workplace spillover and marriage assortative matching offer the most plausible explanation for our findings.

Suggested Citation

  • Syngjoo Choi & Seonghoon Kim & Wooyoung Lim, 2025. "Strategic Thinking Skills: A Key to Collective Economic Success," American Economic Journal: Microeconomics, American Economic Association, vol. 17(2), pages 214-240, May.
    • Handle: RePEc:aea:aejmic:v:17:y:2025:i:2:p:214-40
    DOI: 10.1257/mic.20220259
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    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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