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Cognitive ability and the effect of strategic uncertainty

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  • Nobuyuki Hanaki

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique)

  • Nicolas Jacquemet

    () (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

  • Stéphane Luchini

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales)

  • Adam Zylbersztejn

    () (GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique)

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 x 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.

Suggested Citation

  • Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2015. "Cognitive ability and the effect of strategic uncertainty," Working Papers halshs-01229612, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01229612
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01229612
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. João V. Ferreira & Nobuyuki Hanaki & Benoît Tarroux, 2017. "On the Roots of the Intrinsic Value of Decision Rights: Evidence from France and Japan," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2017-11, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    2. Nicolas Jacquemet & Stéphane Luchini & Jason F. Shogren & Adam Zylbersztejn, 2018. "Coordination with communication under oath," Experimental Economics, Springer;Economic Science Association, vol. 21(3), pages 627-649, September.
    3. Nobuyuki Hanaki, 2019. "Cognitive Ability and Observed Behavior in Laboratory Experiments: Implications for Macroeconomic Theory," GREDEG Working Papers 2019-22, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    4. Bao, Te & Zong, Jichuan, 2019. "The impact of interest rate policy on individual expectations and asset bubbles in experimental markets," Journal of Economic Dynamics and Control, Elsevier, vol. 107(C), pages 1-1.
    5. Allred, Sarah & Duffy, Sean & Smith, John, 2016. "Cognitive load and strategic sophistication," Journal of Economic Behavior & Organization, Elsevier, vol. 125(C), pages 162-178.
    6. March, Christoph, 2019. "The behavioral economics of artificial intelligence: Lessons from experiments with computer players," BERG Working Paper Series 154, Bamberg University, Bamberg Economic Research Group.
    7. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2016. "Fluid intelligence and cognitive reflection in a strategic environment: evidence from dominance-solvable games," Post-Print hal-01359231, HAL.
    8. Kawamura, Tetsuya & Ogawa, Kazuhito, 2019. "Cognitive ability and human behavior in experimental ultimatum games," Research in Economics, Elsevier, vol. 73(1), pages 97-106.

    More about this item

    Keywords

    Strategic Uncertainty; Bounded Rationality; Robot; Experiment;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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