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Cognitive ability and the effect of strategic uncertainty

Listed author(s):
  • Nobuyuki Hanaki

    ()

    (Université Nice Sophia Antipolis
    Skema Business School)

  • Nicolas Jacquemet

    ()

    (Paris School of Economics and University Paris 1 Panthéon-Sorbonne, Centre d’Economie de la Sorbonne)

  • Stéphane Luchini

    ()

    (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS)

  • Adam Zylbersztejn

    ()

    (Université de Lyon and Université de Lyon 2
    CNRS, GATE Lyon Saint-Etienne)

Abstract How is one’s cognitive ability related to the way one responds to strategic uncertainty? We address this question by conducting a set of experiments in simple $$2 \times 2$$ 2 × 2 dominance solvable coordination games. Our experiments involve two main treatments: one in which two human subjects interact, and another in which one human subject interacts with a computer program whose behavior is known. By making the behavior of the computer perfectly predictable, the latter treatment eliminates strategic uncertainty. We find that subjects with higher cognitive ability are more sensitive to strategic uncertainty than those with lower cognitive ability.

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File URL: http://link.springer.com/10.1007/s11238-015-9525-9
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Article provided by Springer in its journal Theory and Decision.

Volume (Year): 81 (2016)
Issue (Month): 1 (June)
Pages: 101-121

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Handle: RePEc:kap:theord:v:81:y:2016:i:1:d:10.1007_s11238-015-9525-9
DOI: 10.1007/s11238-015-9525-9
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/economic+theory/journal/11238/PS2

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