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Cognitive ability and strategic sophistication

  • Carpenter, Jeffrey
  • Graham, Michael
  • Wolf, Jesse

In three experiments we examine the extent to which strategic sophistication (i.e., inductive reasoning, iterative dominance and level-k thinking) is determined by broader cognitive skills. In the first experiment we replicate previous results showing strong associations between cognitive ability and sophistication in a game of iterative dominance and show that similar results arise in a game requiring induction. In the second two experiments we extend the literature in new directions. In Experiment 2 we modify the games to better capture participantsʼ ability to reason inductively and predict the sophistication of others and, again, find strong associations between cognitive ability, measured using a common IQ test, and sophistication. In Experiment 3 we examine more closely the causal nature of the relationship between cognitive ability and sophistication. We use a standard tool from cognitive psychology to randomly shock the cognitive ability of participants and show that this significantly affects game performance.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 80 (2013)
Issue (Month): C ()
Pages: 115-130

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Handle: RePEc:eee:gamebe:v:80:y:2013:i:c:p:115-130
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  2. 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.
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  7. repec:feb:artefa:0097 is not listed on IDEAS
  8. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2009. "Are Risk Aversion and Impatience Related to Cognitive Ability?," CESifo Working Paper Series 2620, CESifo Group Munich.
  9. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-26, December.
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